Reporting standards

• Audit reports shall be dated, signed manually and shall be

issued and distributed in the manner provided by regulations of
the Commission.
• Audit reports shall contain basically the transmittal statement,
scope and objectives of the audit and time period examined
highlights, financial information, findings, recommendations and
conclusions as well as other data that may provide the
management of the audited agency with the necessary input for
the decision-making process.
 Reporting standards
Audit reports shall meet the following reporting criteria:
• Factual matter must be accurately, completely and fairly presented.
• Findings must be presented objectively and in language as clear and
simple as the subject matter permits.
• Findings must be adequately supported by evidence in the audit
working papers.
• Reports must be concise yet complete enough to be readily
understood by the users.
• Information or underlying causes of problems must be included so as
to assist in implementing or devising corrective actions.
 Reporting standards
• Audit reports shall put primary emphasis on
improvement; critical comments shall be presented in
balance perspective, recognizing unusual difficulties or
circumstances faced by officials concerned.
Reporting standards
• Addressed to the Head of the agency
audited
• GOCC or Non-government entity –
addressed to Board of Directors
 AUDIT PROCEDURES

 Acts to be performed in conducting an

examination of accounts
 Proper application will achieve the
audit objectives of the audit program
 AUDIT of assets
The examination and audit of assets shall be
performed with a view to:
• ascertaining their existence, ownership,
valuation and encumbrances as well as the
propriety of items composing the respective
asset accounts
• determining their agreement with records
 AUDIT of assets
• proving the accuracy of such records
• ascertaining if the assets were utilized
economically, efficiently and effectively
• evaluating the adequacy of controls over
the accounts
 AUDIT of assets

• Valuation
• Existence
• Ownership
• Completeness
• Economy and efficiency
 AUDIT of LIABILITIES
Current liability – a short-term debt, regardless of its
resources, including any liability accrued and deferred
and unearned revenue that is to be paid out of the
current assets or is to be transferred to income with
relatively short period, usually one year or less, or a
period greater than a year but within the business cycle
of an enterprise.
 AUDIT of LIABILITIES
Contingent liability – claims pending litigation or
decision of courts or authorities concerned.
• An obligation relating to a past transactions or other
event or condition, that may arise in consequence, as
a future event now deemed possible but not
probable.
 AUDIT of LIABILITIES
Long-term liability – an obligation which will not
become due within a relatively short period, usually a
year
 AUDIT of LIABILITIES
The auditor shall
• seek to establish that all obligations of the
agencies have been accurately recorded;
• only bonafide obligations of the agency have
been included;
• the obligations incurred are properly
authorized;
 AUDIT of LIABILITIES
• all provisions of trust indentures or mortgages
are complied with;
• mortgages and other encumbrances are fully
disclosed.
 AUDIT of
REVENUE/RECEIPTS
The examination and audit of revenue accounts shall
be performed with a view to ascertaining that:
• all earned revenues have been duly recorded
• all recorded revenues have been earned and
appropriate classifications of revenues have been
consistently followed.
 AUDIT of
SURPLUS/NETWORTH
The audit of surplus or networth shall seek to:
• Determine the nature of the surplus, whether
current or invested surplus;
• The amount of current surplus available to
cover appropriations for the operational
expenses of the government;
 AUDIT of
SURPLUS/NETWORTH
• The propriety of the ledger accounts and
balance sheet presentation account;
• The proper authority and recording of
changes in the capital structure made
during the period under audit.
 AUDIT of expenditures
Evaluation and verification of the budget
formulation and execution process to
ensure that all funds are properly
allocated and utilized solely for the
purpose appropriated
 AUDIT of expenditures
The examination of expense accounts shall be
undertaken to ascertain that
• all expense incurred have been duly
authorized; adequately funded and
documented;
• properly recorded;
 AUDIT of expenditures
• all recorded expenses have been actually
incurred; and
• the classifications of expenses are
appropriate and have been consistently
followed.