AUDIT PROGRAM

EQUITY
 Audit Program – Equity

Client:

Period: Year ended

Significant Account(s) / Disclosure(s)

Select significant account(s) / disclosure(s) and relevant assertions for which test of operating effectiveness of controls is planned.
Amount in Rupees
Significant account(s) / Current period Transaction C E A V O P Estimate / Fraud I.T. IR CR RoSM TOE TOD
disclosure(s) balance with related complex Risk reliance
parties nature
Authorized share
capital
Issued, subscribed and
paid-up share capital
Reserves
Unappropriated profit
/ loss
Dividend paid
Dividend payable

1
 Audit Program – Equity

PROCESS ACTIVITY

Equity
Document the key elements of our understanding of the process, including activities in relation to:
- initiation and authorization;
- recording and processing of relevant transaction(s) and relevant I.T. applications, if any; and
- preparation of relevant disclosures.

Initiation and authorization

Recording and processing

Preparation of relevant disclosure

 Audit Program – Equity

Assessed Risk and Relevant Controls

Risks associated with significant account(s) / disclosure(s)

Risk identified Description of control I.T. Frequency To be tested

Component of control
Y / No Annual / Y/N
quarterly /
biannual

Design and implementation of relevant controls

Will a walk-through be performed?

Yes
No

Document the details of walk-through.

Name
Location
Date
 Audit Program – Equity

AUDIT PROCEDURES

Test of Controls
Testing decision

Have we performed test(s) on evaluation of design and implementation of control and documented the
same?
Yes
No
Not applicable

Have we planned to obtain audit evidence from Test of Controls?

Yes
No

Definition of population and units to be tested

Document the procedures performed to test relevant controls.

S. Procedures Assertion Done by W/P
No. Reference

Document the basis of sample selection

Findings

Results of test(s) of operating effectiveness of control

Effective
Not effective
Undetermined
 Audit Program – Equity

Substantive Testing
Substantive Analytical Procedure

Perform Substantive Analytical Procedure.

S. Procedures Assertion Done by W/P

No. Reference
1 Compare current year balances with last year balances and CO
ensure that any significant variation(s) should be properly
reasoned.
2 Enquire into and obtain explanations for any unusual CO
changes during the year.

Test of Detail

Document the impact of our conclusion of the Test of Control on our Test of Detail.

Document the procedures performed for Test of Detail.

S. Procedures Assertion Done by W/P
No. Reference
1 Obtain a schedule of all equity accounts showing number C
of shares authorized, issued, and outstanding at the
beginning and end of the year and all transactions affecting
equity (e.g., dividends, retained earnings) occurring during
the year.
2 Test the summarization of the schedule. C

3 Trace totals to the general ledger. CEA

4 Check the number of shares and amount of issued,

subscribed and paid up capital from:
 Memorandum of association
 Form ‘A’

5 Agree changes in authorized or issued shares to minutes C

and documents filed with the SECP.
6 Agree total of balances on the share registers with the V
issued capital at the balance sheet date.
7 Obtain listing of shareholders/pattern of shareholding C
from CDC and compare it with the details available with
client to work out the actual pattern of shareholding.
8 Agree number of shares and proceeds from issuance of V
new shares to cash receipts and supporting records.
Compute the entries to par value of outstanding shares and
paid in capital.
9 Agree number of shares and value of redemptions to cash CEA
 Audit Program – Equity

disbursements and supporting records.

10 For shares issued as bonus shares: P
 Check board resolution
 Check member’s register to ensure that changes
have been made in number of shares of each
member.
11 Ensure that all receipts are through banking channels,
particularly those from foreign nationals and trace in bank
statement. Match with “Proceeds Realization Certificate”, if
applicable.
12 Companies (Issue of Capital) Rules, 1996 for:
 Shares issued for cash consideration;
 Bonus issue;
 Issue of share for consideration other than cash;
and
 Right issue of shares.

13 Test entries to paid-up capital other than from the

issuance of securities.
14 Test entries to retained earnings other than from net
income, dividends, and treasury shares.
15 Note changes in Directorships with Register of Directors
and Managers and inspect Form 29 filed with the Registrar
of Companies.
16 Determine that dividend payment and liability have been
correctly recorded.
17 Review extracts of board minutes for dividends proposed
and paid.
18 Re-compute calculation of dividends and trace total
dividends to earnings statement. Re-compute liability for
dividend.
19 Agree changes in retained earnings (e.g., income,
dividends) to supporting documentation and trace ending
balance to general ledger and equity accounts.
20 Check that Zakat has been deducted at source and
deposited in the Central Zakat Fund under the provisions
of the Zakat and Ushr Ordinance, 1980.
21 Check that income tax has been deducted from dividend
under the provisions of the income tax Ordinance 2001.
22 Ensure that dividend warrants are issued in the name of
registered shareholders or to their order.
23 Check payment of the dividend (i.e. dispatch of the
dividend warrant) has been made within the time period
as required by Sec 251 of the Companies Ordinance, 1984.
24 Ensure that any unpaid / unclaimed amount of dividends
is adequately disclosed.
25 Ensure that dividends are paid out of profits and no
dividend is paid out of proceeds of sale or disposal of any
immovable property / asset of capital nature.
26 Ensure that amount of dividend payable is being kept in a
separate bank account prior to payment.
27 Determine that disclosures have been made in accordance
 Audit Program – Equity

with the requirement of Companies Ordinance, 1984 and

relevant accounting pronouncements.

Document the basis of sample selection

Document the significant findings / issues identified, if any.

Findings

Sufficient appropriate audit evidence obtained that the account is not materially misstated.
Yes
No
Undetermined

Prepared by: Sign Date

Reviewed by: Sign Date

Reviewed by: Sign Date

Approved by: Sign Date