Procedures & program of auditing assets. Section one Procedures & program of Auditing Fixed Assets

Transcription

1 CHAPTER FOUR Procedures & program of auditing assets Section one Procedures & program of Auditing Fixed Assets 1. Record and inspection 1-1 Examining due procedures of the properties of fixed assets. 1-2 Verifying that there are records for all kinds of the fixed assets and their correction and registering are correctly accomplished. 1-3 Verifying the correctness of registering and controlling on the assets used by others. 1-4 Assuring that fixed assets records would be recomcitiate correctly with the general ledger. 1-5 examining the correctness of registering additions in the fixed assets record. 2. Additions and eliminations. 2-1 examining that purchases orders of the fixed assets and variations and modifications are accomplished according to the authorities and instructions. 2-2 examining the correctness of capital and revenue expenses analysis. 2-3 Assuring that bills are correctly approved. 2-4 Auditing and examining registered additives in the ledger fixed assets record and bills. 2-5 Assuring that there is control and authorization for over expenditures. 2-6 Examine the correctness of registering &the contractors due insurances. 2-7 making sure the correctness of registering and assessing of cost of internal products. 2-8 Ascertaining that all sales and written off are accomplished according to the authorities and recorded correctly. 2-9 Ascertaining the correctness of and registering costume exemptions and other investment assistances if there was any Checking the estimated budget of capital expenditures to confirm the reliable expend tures were expended according to the instructions and were not ignored Making sure of isolating the assets cost used by the entity which belong to other parties Examine the accuracy of saving procedures of the propriety documents of fixed assets and their separation from people in charge for their possession. 3- Depreciation 1

2 3-1 Examining the accuracy of depreciation accounting according to estimated rates in the unified accounting system. 3-2 Assuring the accuracy of depreciation accounting for the purchased & excluded assets within a year. 3-3 Assuring that there would be no variation in the bases of accounting depreciation in the current and previous year. 3-4 Assuring that there would be no change in the bases of accounting depreciation in 100% of the full depreciated assets and it is isolation to the reserve account of prices rising of fixed assets. 3-5 Ascertaining the correctness of other adding &accounting in the depreciations lists fixed assets records and daily entries. 4- Miscellaneous 4-1 notifying on the assets insurance documents against fire and confirming insurance coverage with cars insurance documents identification with transportations means statements to con firm possession and the completion of information. 4-2 Assuring of fixing all the imported and received assets in the assets record and also the purchased assets from the local market. 4-3 Making sure of the full inventory for all entity assets according to established rules and identifying the actual inventory results with the records. 4-4 Examining maintenance expenditures Accounts movement to ascertain the accuracy of distinguishing among expenditures revenues and capital. Section two Procedures and Auditing Programs of project under execution 1- Ascertaining the collection for all expenditures expended on assets under processing within projects accounting under process. 2- Assuring of not accounting the depreciation of assets under process. 3- Assuring the transferring of assets achieved from projects account under process to the fixed assets account. 4- Examining procedures and projects execution ways whether they are executed by direct way or by bidding process. 5 Chapter eight would be reviewed from this guide reference to procedures and auditing programs of the national development plan. 2

3 Section three Procedures Auditing programs of inventory 1- Making sure that the level of inventory would be regularly reviewed. 2- Examining the followed procedures to inform about damaged slow in transferring and useless goods. 3- Making sure that disposal of goods would be according to the authorities and in proper way. 4- Ascertaining regular posting to the inventory records without delaying. 5- Ascertaining material cards testing in the stores brand ledger and the control accounting. 6- Ascertaining that ordinary entries in the inventory records are done accurately. 7- When registering the value besides the quantity in the ledger of inventory there should be periodical reconciliation with the control accounting of inventory. 8- Examining the settlements and entries to amend the differences of reconciliation. 9- Examining the correctness of gathering inventory record. 10- Examining the correctness and adequacy of inventory procedures. 11- making sure that all the inventories are regularly calculated. 12- Examining the procedures to reconcile the actual inventory with their records to reconcile the warehouse cards with the inventory lists & the ledger. 13 Verifying the amendments of inventory records due to reconciliations according to the authorities. 14 Verifying the reconciliation of the inventory consigned to external parties done regularly and getting certificate from these parties when they are not reconciliated. 15- Verifying of the reconciliation of saved inventories which belong to another party. 16- Verification of doing periodic accurate reconciliations between the cost accounts and financed accounts. 17- Verification of the accuracy of assessing inventory when laded to the cost accounts and verification of not over loading profits when transferring between the departments and stages. 18- Checking the adopted procedures for amending the inventories assessment. 19- Checking the accounting allocations or minimizing inventories values and inspecting for any inventories types would always be less then the cost price. 20- Assuring that there is coordination between the stores and the purchases directorate over receiving and delivering the special orders to the concerned parties with out delay and promoting both receiving and delivering processes with juridical documents. 3

4 21- Studying reasons for materials damage and how to deal with them. 22- Studying the usability of the stores for inventories and assuring the commitment of safety conditions of the stores. 23- Ascertaining that all the imported goods were priced and confirmed with the closed letters of credit. 24 Comparing the prices and quantities of the inventories registered in the inventory lists with their counter pants in the last year inventory lists. In process and manufactured goods 1- Ascertaining experimentally that all business accomplishments according to production orders of authorized parties. 2- Checking expenditures control procedures and adding them on ready goods expense. 3- Ascertaining experimentally that all deleted expenditures were correctly authorized by adopted procedures for reflecting appropriate costs when supplying goods in process. 4- Verifying that all accident al lost and profits due to the production were put in consideration and notifying on the industry natural damage percentage and that they are within reasonable limits. 5- Checking the verification procedures of the accuracy of goods in process records by studying goods in process that gives the quantities continuous registering to compare the transmitted quantities as final goods with the quantities of used raw materials. 6- Assuring experimentally way that expenditures were allocated to accusations commitments or phases correctly. 7- Experimentally assuring that unaccomplished commitments profit was correctly accounted according to the unified accounting system. Examining the interior monitoring system ( confining responsibilities documents availability stores organizing saving documentation method and individuals security). 9- Assuring that manufactured and in process goods would have full inventory and should be inspected in case of no inventory. 10- Ascertaining the procedures correctness of stopping goods movement at the end of the year. 4

5 Documentary letters of credit (External purchases) 1- Observing that there is materials purchase order by the purchases of the stores (stores should confirm lack of these materials). 2- Ascertaining that there are letter of credits in the accounts. 3- Observing tenders announcements procedures or the direct contact and checking the biding phases until it would be awarded. 4- Assuring the order number purchase order number letter credit number and the purchase committee decision number. 5- Approving to open letter of order according to the authorities. 6- Opening letter of credit within the offer specified period. 7- Goods specifications and other conditions according to supplying offers and the matching with L/C. 8- Making insurance by amount. 9- Approving on opening letter of credit according to given authorities. 10- The letter of credit would be valid till the goods shipment. 11- The import permit amount would cover the letter of credits 12- Assuring the withdrawal of all the L/C amount of the foreign currency by Iraqi Dinars. 13- Assuring the correctness of l/c insurance registering and others expenditures in the l/c account correctly and matching the bank advices. 14- Approval upon increasing the L/c amount if necessary. 15- Matching shipment documents of the preparatory offer and conditions of l/c opening if there would be any differences in shipment documents and the entity would approve for them Approval should be noted by the authorized party. 16- there should be the signature of the commercial attaché on the purchase lists when the purchasing would be by delegates according to what was mentioned in the circular of the presidency of the republic presidential Dewan no s 106 in 6/2/ observing that basrah would be fixed. 18- The inspection about the entity being paying high properties fees and putting conditions to prevent this to happen again. 19- Studying the special orders imported by airway and discussing their causes. 20- Accounting auditing of l/cs records. 21- Studying the close of either l/c according to it s shipments or as a whole and noting frozen shipping documents and preventing formal closing for some of the l/cs. 22- Organizing the receiving minutes of imported materials and observing the signature of the insurance company representative and the demanding party for matching the specifications. 5

6 23- Organizing decreasing minutes of lack or damaged materials in opening goods cases with assuring the accuracy of the accountant entry procedure means adding it on the provider of the insurance company. 24- Observing the damaged goods entry style (Registering the damaged goods in an intermediate account ). 25- Observing the inventory voucher and matching it with the commercial list and other documents. 26 Observing the materials pricing and the l/c closing correctly. 27- Observing the following up of the delayed goods in arrival. 28- Settlement of stopped costumes commitments. 29- Matching l/c consequences statement approved by the bank with the l/c records. 30- Observing the pricing of the imported goods in details including the free imported goods. 31- Observing l/c irregular accounts. 32- Refusing the delay of closing l/c because of damaged goods and also for the delay in materials pricing because of not delivering shipment documents and closing the l/c. 33- Noticing the ability of the purchases administration to implement the budget of the commodity requirements according to scheduled work plan and single reports come successively which causes the division of the purchases and duplication the cost and effort. The internal (local) procurements 1- Making sure that the procurement process was achieved by procurement committee and according to the financial rights (observing the procurement instructions). 2- Noticing the sequence of the procurement process availability of request from the department approval of the request obtaining requests decision of the Awarding to the suitable offer sale list from the alienee or receipt voucher stock receipt document of the purchased materials with noticing the matching of the items with all the mentioned documents. 3- when the materials are sold by the socialist sector it shall be noticed that the entity bought from the mentioned sector or the local markets when it is impracticable to buy from the public sector with observance of obtaining the cash discount from the entity of socialist sector. 4- Noticing the accounting instructions the posting and the classification of the procurement vouchers. 5- Noticing that the entity made the required inquiries about the new sources of the goods before sending the procurement orders. 6

7 6- Ascertained the validity of the registration process and selling the unpackings. 7- Checking and examining the validity of the control, the transaction and the internal adjustment of the received invoices and credit advices as regards the approval of these invoices and the received credit advices and the validity of its scruling distributing the copies and the availability of distinctive sign or phrase on the invoices copies to distinguish them from the original invoices. 8- Checking and examining the validity of controlling the balances of procurements ledger and its matching with the accounting statements submitted by the suppliers. 9- Checking and examining the validity of bookkeeping the procurements ledger and controlling on. Section four Procedures and programs of auditing granted loans (the debtor) 1- Auditing the loans contracts and keeping their terms in the permanent work file. 2- Auditing all the annual movements of loans and making sure that the loans payment or its due installment is faid in the due dates. 3- Making sure that the granted loans during the year was done according to the powers. 4- Requesting a direct confirmation from the debtor parties by the loan balance. 5- Verifying the appropriate allocation was counted from the loans which were considered irrecoverable. 6- Making sure that the total of loans balances were compatible with its account balance in the trial balance. 7- Matching the creditor interests with the interests who were supposed to be collected and making sure that they were received in the due dates as well as observing the validity of the materialized interests and those which weren t received and the reasons of that. 8- Examining the possession and sufficiency of the insurances of the granted loans in case of their availability (according to the agreed provisions). 7

8 Section five Procedures and programs of auditing financial investments 1- Studying the internet auditing system to control the investment. 2- Achieving an inventory to all the financial papers existed in the entity 12/ Requesting subsidiary trial balance of the items and conforming with the inventory minutes and the items of subsidiary ledger counting the statement and matching the total with the general ledger. 4- Examining the validity of investment owner shop to the entity by checking the shares certificates or any other documents confirmed the ownership. 5- Auditing the incoming annual movement on the mentioned account in other word examining all the sales and purchases during the year by checking and reviewing the agreements and the decisions of the board of directors related to it. 6- Making sure that all the realized investments incomes were received. 7- Noticing the validity of the realized incomes outside the country after taking the foreign taxes into consideration. 8- Ascertained the validity of the investments evaluation by returning to :- A- The final sharing accounts of the entity. B- The price of the stock markets if to be found. c- Any other information. 9- Following up the drawings of a lottery accrued on the vouchers and its realized incomes. 10- Requesting confirmations according to specific formula within the general confirmation certificate. Section six Procedures and programs of auditing the debtors 1- Examining the internal auditing system. 2- Requesting trial balance with the items of the debtor accounts balances counting the balance and conforming the final total with the trial balance. 3- Obtaining a direct confirmations from the debtors by which they affirm their accounts balances and studying these confirmations and finding out their percentage making sure of obtaining a confirmation about the significant balances. 4- Obtaining a statement of the immovable or slow movement debts. 5- Obtaining statements of the current accord of accounts with the entity subjects to the beard as well as the board itself. 8

9 6- Verifying the analytical statement of the compensation requests and the fate of each one of them. 7- Studying the special loans granted to the officials of the entity. 8- Obtaining confirmations of the insurances at others. 9- In case of examining the cause of debt by other debtors. 10- Checking the validity of the irregular balances transaction. 11- Undertaking an integral study for all the debts which are written off during the year and acquainted with all the telephone calls and verifying the availability of powers for the decision source of the write off. 12- Examining the sufficiency of the necessary allocation for all the debts. Which were doubtful to obtain them and the litigated balances compensation requests and the creditor memorandum issued at the end of the year which belongs to the accounts of the year under auditing. 13- Checking the validity of the cutoff at the end of the year. The notes receivable 1- Requesting statement of the notes receivable at the end of the year and making an inventory at the same date. 2- Checking the note receivable from the formal aspect. 3- Conforming the statement with the results of inventory counting the statement and affirming the total with the apparent balance in the trial balance. 4- Studying the ability of obtaining the note receivable and the availability of the realized notes receivable and those which were not received at the end of the year and inquiring the reasons of that. 5- Noticing of not reversing the realized and standing notes receivable on the receivables account. 6- Checking the internal adjustment measures of the notes receivable and determining the admission of the notes receivable by a responsible official and keeping them with another official following up their collection. 7- Obtaining a confirmation from the ban; about the details of its discounted papers to establish the value of the potential demands at the end of the year. 8- Obtaining a confirmation of the notes receivable having by others as a warrant at the person or sending them to be discounted but didn t discount yet as well as obtaining conformation of the notes receivable by the collection free. 9- Concentrating on the frozen notes receivable the reason of their renewal and the ability of debtor to pay. 9

10 10- Verifying the possibility of counting and registering interests on the frozen notes receivable. 1-The monetary Section seven Procedures and program of auditing advances monetary 1-1 Making sure that all the checks and the received cash were registered appropriately and the auditing process should include what was received by post collected by tax collector and received by other departments. 1-2 Making sure that monetary amounts and the received checks which confirmed in the find record were deposited in the bank without any delay and this is including the following procedures :- A- Examining the registration of received cash (the fund record with the sealed depositing coupons by the bank and noticing the amounts items as well as the total and inquired about any delay in the depositing ). B-Examining the fund record with registering the received cash. C Examining the fund record with the bank statement and paying attention to any evidence of inappropriate practices in the accounts checking the obtainment of original depositing coupons from the bank if the sealed copies are not available or there is a doubt about its correctness. 1-3 Making sure that all the used and issued vouchers are numbered serially and registered appropriately in the fund record. 1-4 Assuring that all the cut discounts are correct. 1-5 Making sure that the checks and the received cash are posted property for each of the personal and nominal accounts. 1-6 Assuring that the notes receivable are registered appropriately and the control over its collection and receipt is sufficient. 1-7 Checking the validity of count the records of the received cash. 1-8 Making sure that all the checks are signed appropriately and used serially, there is a control over the issued unused and concealed checks and other reports of the offices and institutions that subject to the ministry either these reports are quarterly or final or related to the activities of the offices and institutions of the ministry,in this report the board shows the weak point as well as the blank checks if it is available. 1-9 Assuring that all the checks or the authorizations of payment to the bank are enhanced by regular vouchers and stamped of payment correctly, auditing the first installments such as the wages installments, the salaries and enhanced the advances and the cash payment to foreign bodies Making sure that all the draft checks are registered in the found journal and sent without delay. 10

11 1-11 checking the payment in the fund journal with the checks coupons returned by the bank and signed by the beneficiary with disclosing the bank account for the period before the date of the budget directly to be sure of the bank account settlement Assuring that all the paid amounts are achieved to recognize them accurately with taking the due monetary discount into consideration Making sure that the paid amounts are posted properly for each of the personal and nominal accounts Assuring that the paid amounts are registered appropriately and the payment is implemented in the due date Examining the count correctness in the fund records making sure that the restrictions in the bank account are within the power limits Assuring that the bank settlement is achieved regularly Assuring that the monetary transfers between the center and the branches are registered properly Examining the bank settlements and noticing the subsequent date in which the suspended settlement is achieved and inquired about the unusual reasons of delay Checking the validity of the internal adjustment measures such as the insurance against the disloyalty and the segregation between the registration and receipt, the procedures of cash transferring. 2- The Advances and petty. 2-1 Assuring that all the payments are enhanced by regular vouchers and checking the means of advances renewal. 2-2 Checking the powers of expenditure from the petty. 2-3 Making sure of making inventory for the advances and accordance them the expenditure is implemented within the limits of authorized powers only abolishing all the vouchers and the enhanced attachments for the expenditure correctly with marking the payment date. 2-4 Making sure of returning the advances enhancement and registering them properly within the powers. 2-5 Assuring that the stamps records are controlled correctly. 2-6 checking the validity of the expenditures post. 2-7 Examining the validity of count the petty records, the stamps and other advances. 2-8 Making inventory to the fund and all the other advances and the stamps at the same time. 2-9 Making sure of making inventory of all the cash, the stamps and matching them with its balances at the end of the year and taking into 11

12 consideration the payment and receipt between the end of the year and the inventory Examining the control steps on the cards of the shops and restaurants and others. 12