External Audit

Audit ,[object Object],[object Object],Definition ,[object Object],[object Object],[object Object],Underlying objectives ,[object Object],[object Object],Frequency

Types of Audit Financial Statements Audit Auditor expresses his opinion on the financial statements of the project Compliance Audit Auditor verifies compliance with internal rules, regulations, procedures and processes laid down by Management Operational Audit Thorough examination of the project’s management techniques & performance. Study of all functional areas, identifying implementation issues & recommending remedial actions to improve efficiency & effectiveness of operations Mandatory in IFAD projects

Audit Roles Borrower/ grantee ,[object Object],[object Object],[object Object],External Auditor ,[object Object],[object Object],[object Object],IFAD ,[object Object],[object Object],[object Object],[object Object]

Audit Requirements per Financing Agreement/ LTB ,[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Audit Requirements per Financing Agreement/ LTB

Scope and Objectives of Audit ,[object Object],[object Object],[object Object]

External Auditor – Who Performs? ,[object Object],[object Object],Who performs? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],External auditor outputs

External Auditor – Basis of work Basis of work ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Financial Statement Audit verifies ,[object Object],[object Object],[object Object],[object Object]

Financial Statement Audit verifies ,[object Object],[object Object],[object Object],[object Object],[object Object]

Audit Reports – Contents ,[object Object],[object Object],[object Object],[object Object],The auditor may also add additional information to the report if deemed necessary without changing the overall opinion of the report

Audit Reports – Opinions ,[object Object],[object Object],[object Object],[object Object],[object Object],* In some cases the clean audit opinion issued is not entirely consistent with audit findings in the financial data, management letter or IFAD’s findings in supervisory activities ** Potentially not acceptable to IFAD – IFAD’s audit standards foresee that an unqualified opinion should be received for all its projects, programmes & grants. A qualified opinion may be accepted only if there is evidence of a time-bound workplan to implement changes or if the qualification does not impinge on IFAD’s fiduciary responsibilities *** Not acceptable to IFAD. Financial statements to be re-done and re-audited

1. Unqualified Opinion/“Clean” opinion This is regarded as the equivalent of a “clean bill of health” to a patient 2. Qualified Opinion/“Except for” Opinion ,[object Object],[object Object],[object Object],[object Object],3. Adverse Opinion report The financial statements do not conform to GAAP. It is the opposite of an unqualified opinion; the data is materially incorrect, unreliable, and inaccurate 4. Disclaimer of Opinion report This Opinion is rare; issued when the auditor could not form an opinion, as he cannot complete the audit work due to various reasons, such as significant scope limitations Audit Reports – Opinions

Management Letter ,[object Object],[object Object],[object Object],[object Object]

Audit – Responsibilities of PMU ,[object Object],[object Object],[object Object],[object Object],[object Object]

Audit – Responsibilities of IFAD ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Selection & Appointment of Auditors ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Contents of Audit Engagement Letter ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Responsibilities of the Auditor ,[object Object],[object Object],[object Object],[object Object]

Follow up of audit recommendations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Status of audits ,[object Object],[object Object],Audit Report for the Period Due Date Submitted by Auditors on Submitted by IFAD on Remarks

Audit Review Form/Checklist ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

External Audit

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