Cororate Affairs Commission checklist for auditors to review financial statement
I. Documentation Verification
- Review applicable accounting standards.
- Ensure alignment with GAAP or IFRS.
- Check for consistency in accounting policies.
- Identify any deviations and assess impact.
- Compile a list of required documents.
- Verify receipt of all listed items.
- Check for completeness of each document.
- Document any missing items and follow up.
- Obtain the latest version of documents.
- Verify registration with corporate authorities.
- Check for amendments or updates.
- Ensure documents are easily accessible.
- Review records for date stamps.
- Check signatures against authorized list.
- Ensure timely documentation.
- Flag any discrepancies for follow-up.
- Identify significant transactions.
- Collect corresponding supporting documents.
- Cross-check details for accuracy.
- Document any inconsistencies or gaps.
- Compare trial balance to general ledger.
- Check for unusual account balances.
- Ensure all accounts are included.
- Investigate any discrepancies.
- Gather financial statements from prior periods.
- Verify completeness of historical data.
- Ensure consistency in presentation.
- Document any changes in accounting treatment.
- Review journal entries for supporting documents.
- Confirm approvals for each entry.
- Ensure entries are properly categorized.
- Flag any unsupported entries for review.
- Obtain the fixed asset register.
- Reconcile with general ledger balances.
- Ensure all additions and disposals are recorded.
- Document any discrepancies found.
- Review documented accounting policies.
- Compare with prior periods for consistency.
- Assess reasonableness of estimates.
- Document any changes and rationale.
- Identify all year-end adjustments.
- Collect documentation for each adjustment.
- Assess justification for adjustments.
- Ensure proper approval is documented.
- Gather all relevant tax filing documents.
- Verify compliance with tax laws.
- Check for timely submissions.
- Document any issues or discrepancies.
- Compile a list of relevant contracts.
- Verify availability of all contracts.
- Review contracts for completeness and compliance.
- Document any missing or incomplete agreements.
II. Compliance with Regulatory Requirements
- Review the financial statements for required disclosures.
- Ensure that the format aligns with CAMA guidelines.
- Check for proper authorization and signatures.
- Verify that accounting policies are consistent with CAMA.
- Examine tax returns for accuracy and completeness.
- Verify timely payment of VAT and Corporate Income Tax.
- Confirm appropriate tax provisions are recorded in financial statements.
- Ensure compliance with any tax incentives or exemptions.
- Identify relevant industry regulations for the manufacturing sector.
- Review procedures in place for compliance monitoring.
- Assess documentation and records related to regulatory compliance.
- Ensure that any required certifications are up to date.
- Review financial statements for alignment with IFRS guidelines.
- Check for proper disclosure of accounting policies and estimates.
- Ensure consistency in applying IFRS across periods.
- Confirm that all relevant IFRS updates have been incorporated.
- Examine financial statements for compliance with NFRS.
- Verify that all prescribed disclosures are included.
- Ensure the entity has registered with the Financial Reporting Council.
- Check for periodic training on NFRS for relevant personnel.
- Confirm timely submission of required SEC reports.
- Review adherence to corporate governance codes.
- Check disclosures related to related party transactions.
- Assess compliance with insider trading regulations.
- Compile a list of all required statutory filings.
- Verify submission dates against regulatory deadlines.
- Check for any outstanding filings or penalties.
- Confirm acknowledgments of receipt from regulatory bodies.
- Review the AML/CTF policy and procedures.
- Verify employee training on AML/CTF regulations.
- Check for suspicious activity reporting protocols.
- Ensure record-keeping practices meet regulatory standards.
- Review payroll records for compliance with labor laws.
- Confirm timely submission of NSITF contributions.
- Assess employee benefit programs for legality.
- Ensure compliance with workplace health and safety regulations.
- Examine environmental impact assessments if required.
- Check for compliance with waste disposal regulations.
- Confirm adherence to emissions standards where applicable.
- Review permits for any hazardous materials used.
- Assess marketing materials for compliance with truth-in-advertising standards.
- Check return and refund policies for legality.
- Review customer complaint handling procedures.
- Ensure product safety standards are met.
- Review data protection policies and procedures.
- Ensure consent mechanisms for data collection are in place.
- Check for data breach response plans.
- Confirm employee training on data protection regulations.
- Identify all relevant licenses and permits needed.
- Verify that all licenses are current and valid.
- Check for compliance with renewal requirements.
- Assess penalties for any non-compliance incidents.
III. Financial Statement Analysis
- Verify asset classifications and values.
- Check for completeness of recorded liabilities.
- Ensure alignment with accounting standards.
- Review supporting documentation for major items.
- Check revenue recognition policies against standards.
- Ensure expenses are categorized correctly.
- Identify any irregularities in reporting periods.
- Review significant revenue streams for trends.
- Verify cash flow classifications.
- Ensure reconciliation with net income is accurate.
- Check for any non-cash transactions.
- Review changes in cash balances for consistency.
- Calculate liquidity ratios like current and quick ratios.
- Assess profitability ratios such as gross and net margin.
- Evaluate solvency ratios including debt-to-equity.
- Analyze trends in ratios over time.
- Compare current statements with prior periods.
- Identify any significant fluctuations in figures.
- Analyze reasons behind major changes.
- Document findings for further review.
- Identify relevant industry benchmarks.
- Compare key metrics against peers.
- Assess areas of strength and weakness.
- Prepare a comparative report for stakeholders.
- Ensure all accounting policies are disclosed.
- Check for completeness of estimates and judgments.
- Assess clarity of financial statement notes.
- Verify compliance with disclosure requirements.
- Review tax provision calculations.
- Ensure compliance with local tax regulations.
- Check for any deferred tax assets or liabilities.
- Document any tax-related risks.
- Verify inventory valuation methods used.
- Assess how methods affect COGS and profitability.
- Check for consistency in inventory accounting.
- Document any significant changes in valuation.
- Analyze the mix of debt and equity financing.
- Review compliance with debt covenants.
- Evaluate implications of capital structure on risk.
- Document any concerns related to solvency.
- Identify transactions that stand out in size or nature.
- Gather documentation for significant transactions.
- Assess implications of these transactions.
- Report findings and any necessary actions.
- Review translation methods used for foreign currencies.
- Check for consistent application across statements.
- Assess impact on financial results and ratios.
- Document any foreign exchange risks.
- Identify events occurring after the reporting period.
- Evaluate their impact on financial statements.
- Ensure appropriate disclosures are made.
- Document findings for audit trail.
IV. Internal Controls Evaluation
- Conduct interviews with key personnel.
- Review documentation of existing controls.
- Perform walkthroughs of financial reporting processes.
- Identify gaps or weaknesses in controls.
- Document findings and recommendations.
- Examine inventory records and count procedures.
- Evaluate valuation methods used (e.g., FIFO, LIFO).
- Verify accuracy of inventory quantities.
- Assess the timeliness of inventory adjustments.
- Ensure compliance with accounting standards.
- Review access controls to physical and digital assets.
- Evaluate security measures in place.
- Inspect inventory and asset tracking systems.
- Assess procedures for asset disposal.
- Document any vulnerabilities found.
- Analyze revenue recognition policies.
- Verify compliance with relevant accounting standards.
- Assess timing of revenue recognition.
- Review documentation for sales transactions.
- Test a sample of revenue entries.
- Identify critical financial processes.
- Map out roles and responsibilities.
- Evaluate potential conflicts of interest.
- Verify that duties are appropriately segregated.
- Document any deficiencies.
- Review transaction processing procedures.
- Assess authorization protocols.
- Verify completeness of transaction records.
- Test accuracy checks in data entry.
- Document any inconsistencies.
- Review access control policies and logs.
- Evaluate change management processes.
- Inspect data backup procedures and schedules.
- Test recovery procedures.
- Document any weaknesses identified.
- Assess risk assessment methodologies.
- Evaluate the identification of key risks.
- Review mitigation strategies in place.
- Test the effectiveness of risk management.
- Document findings and recommendations.
- Review payroll processing procedures.
- Evaluate controls over employee data changes.
- Test payroll calculations for accuracy.
- Verify compliance with tax regulations.
- Document any control issues.
- Review ongoing monitoring policies.
- Evaluate frequency and scope of monitoring activities.
- Assess the reporting of deficiencies.
- Test follow-up actions taken.
- Document the effectiveness of monitoring.
- Examine internal audit reports.
- Verify follow-up on audit recommendations.
- Assess the scope of audits performed.
- Evaluate the independence of internal audit functions.
- Document any gaps in audit coverage.
- Review procedures for financial statement preparation.
- Assess data verification processes.
- Evaluate interdepartmental communication.
- Test accuracy of financial data inputs.
- Document findings and recommendations.
- Review reimbursement request procedures.
- Evaluate approval workflows.
- Test a sample of reimbursement transactions.
- Verify compliance with company policies.
- Document any discrepancies found.
V. Related Party Transactions
- Review financial statements for disclosures.
- Cross-check with supporting documentation.
- Ensure clarity and completeness of disclosures.
- Verify compliance with accounting standards.
- Document all identified transactions.
- Review transaction terms for fair pricing.
- Check for independent third-party benchmarks.
- Ensure proper documentation is maintained.
- Confirm the rationale for pricing decisions.
- Assess any potential conflicts of interest.
- Obtain the current related party policy.
- Evaluate policy adherence in transactions.
- Check for updates or amendments.
- Ensure policy is communicated to all levels.
- Document any deviations from the policy.
- Review organizational charts for related entities.
- Consult legal and compliance records.
- Engage with management for insights.
- Verify all parties against accounting records.
- Document rationale for inclusions/exclusions.
- Research comparable market transactions.
- Analyze pricing and terms for fairness.
- Engage valuation experts if necessary.
- Document findings and comparisons.
- Assess overall reasonableness of terms.
- Quantify impacts on revenue and expenses.
- Review effects on net income.
- Assess impact on cash flows.
- Evaluate overall financial position changes.
- Document and summarize findings.
- Review approval documentation.
- Check for compliance with governance policies.
- Ensure proper levels of oversight are adhered to.
- Document the approval process.
- Evaluate any lapses in oversight.
- Gather all relevant contracts.
- Review for regulatory compliance.
- Assess terms for legality.
- Check for required disclosures.
- Document compliance findings.
- Review relevant accounting standards.
- Identify transactions requiring disclosures.
- Ensure disclosures are made in financial statements.
- Document rationale for any omissions.
- Check for updates in standards.
- Review internal control policies.
- Evaluate effectiveness of monitoring systems.
- Check for regular reporting mechanisms.
- Assess staff training on controls.
- Document any weaknesses in controls.
- Review cash flow statements for accurate classification.
- Cross-reference with transaction details.
- Ensure consistency with financial reporting.
- Document any misclassifications.
- Assess impact on cash flow analysis.
- Analyze ratios affected by transactions.
- Evaluate potential risks to financial stability.
- Document any negative implications.
- Consider management responses to findings.
- Prepare summary for stakeholders.
VI. Audit Trail and Evidence
- Identify all financial transactions in the reporting period.
- Trace each transaction from source documents to financial records.
- Verify that every transaction has an associated unique identifier.
- Ensure transaction timestamps are accurate and consistent.
- Check for proper segregation of duties in transaction processing.
- Determine the necessary evidence based on audit objectives.
- Gather evidence from multiple sources for reliability.
- Evaluate the relevance and reliability of the collected evidence.
- Document the procedures used to obtain audit evidence.
- Ensure that evidence covers all material assertions.
- Compare records for discrepancies in amounts or dates.
- Ensure all required documentation is present and accounted for.
- Check for missing signatures or authorizations.
- Confirm that records are maintained in an organized manner.
- Verify that all records are up-to-date and accurate.
- Match each transaction to its corresponding supporting document.
- Check that all documents are properly filed and accessible.
- Ensure that documents contain necessary details like dates and amounts.
- Confirm that documents are stored in a secure location.
- Identify any missing documents and follow up for retrieval.
- Evaluate system access controls and permissions.
- Review change logs for modifications to financial data.
- Check for data backup protocols and recovery options.
- Conduct user interviews to understand system limitations.
- Ensure compliance with data security standards.
- Verify that each general ledger entry has a clear reference.
- Trace entries back to their source documents for validation.
- Ensure that all ledger accounts are properly reconciled.
- Confirm that adjustments are adequately documented.
- Check for any unsupported entries in the ledger.
- Review adjustment documentation for accuracy and completeness.
- Ensure that all journal entries have proper authorization.
- Verify that adjustments are recorded in a timely manner.
- Check for consistency in how adjustments are made.
- Document the rationale behind each adjustment.
- Identify transactions that deviate from expected patterns.
- Request detailed explanations for any discrepancies from management.
- Document management's responses and rationale for unusual transactions.
- Evaluate the reasonableness of explanations provided.
- Follow up on unresolved discrepancies as necessary.
- Review user access levels for financial systems.
- Test the functionality of authorization workflows.
- Ensure that only authorized personnel can modify financial records.
- Document any unauthorized access attempts.
- Evaluate the effectiveness of existing access controls.
- Examine the frequency and thoroughness of reconciliation procedures.
- Verify that reconciliations are completed timely and accurately.
- Check for discrepancies and how they are resolved.
- Ensure that reconciliations are reviewed and approved.
- Document any adjustments made during the reconciliation process.
- Review current policies for document retention and destruction.
- Ensure compliance with relevant laws and regulations.
- Verify that documents are retained for the required duration.
- Assess the security of stored documents.
- Document any deviations from established policies.
- Select key transactions for the walkthrough process.
- Trace transactions through each stage of processing.
- Engage relevant personnel to explain their roles.
- Document any weaknesses or gaps identified.
- Ensure that the audit trail aligns with documented procedures.
- Select appropriate data analytics tools for analysis.
- Identify key metrics and thresholds for anomalies.
- Run analyses on financial data sets for unusual patterns.
- Review findings and prioritize items for follow-up.
- Document the results of the data analytics process.
VII. Management Representation
- Request a signed letter from management.
- Ensure it covers all key aspects of the financial statements.
- Verify the timing of the representations aligns with the audit period.
- Document any exceptions or qualifications in the representations.
- Identify key estimates and judgments impacting financial statements.
- Evaluate the rationale and assumptions used by management.
- Assess the consistency of estimates with previous periods.
- Document findings and any concerns regarding the estimates.
- Review notes to the financial statements for completeness.
- Inquire about any undisclosed liabilities or risks.
- Assess the impact of external factors on disclosures.
- Document any missing disclosures and follow up as necessary.
- Review events occurring after the reporting period.
- Discuss with management any significant transactions or events.
- Confirm that these events are reflected in the financial statements as needed.
- Document the nature and impact of subsequent events.
- Review the risk assessment procedures in place.
- Evaluate how management communicates risks to the audit committee.
- Check for documentation supporting risk identification.
- Document findings and any gaps in risk communication.
- Request management's written assessment of going concern.
- Evaluate the assumptions used in their assessment.
- Consider the adequacy of disclosures related to going concern.
- Document any concerns regarding the going concern assumption.
- Verify that management provides written confirmations of compliance.
- Assess the impact of non-compliance on financial statements.
- Document any identified instances of non-compliance.
- Follow up on any areas of concern with management.
- Review disclosures for all related party transactions.
- Confirm that the transactions are appropriately valued.
- Assess the adequacy of disclosures regarding relationships.
- Document any missing or inadequate disclosures found.
- Verify that all requested documents have been received.
- Assess the timeliness of information provided by management.
- Document any delays or issues in accessing records.
- Follow up on any outstanding information requests.
- Identify any recent changes in accounting policies.
- Evaluate the rationale for these changes.
- Assess the impact on financial statement presentation.
- Document the discussion and any implications for the audit.
- Obtain management's assessment of internal control effectiveness.
- Evaluate any identified weaknesses or deficiencies.
- Assess the adequacy of internal controls in preventing fraud.
- Document findings and any recommendations for improvement.
- Request a signed assertion from management.
- Discuss potential liabilities or contingencies with management.
- Evaluate the completeness of disclosures related to liabilities.
- Document any concerns regarding undisclosed liabilities.
VIII. Final Review and Reporting
- Check all adjustments recorded in the financial statements.
- Ensure consistency with prior periods where applicable.
- Confirm that all identified errors have been corrected.
- Verify that all necessary disclosures are included.
- Draft the audit report summarizing findings.
- Include clear recommendations for improvements.
- Ensure the report aligns with auditing standards.
- Obtain management's feedback before finalizing.
- Confirm the completeness of financial statements.
- Verify the consistency of accounting policies.
- Ensure all necessary disclosures are included.
- Check for compliance with relevant accounting standards.
- Review significant estimates and judgments made.
- Assess the overall presentation and format.
- Evaluate the adequacy of supporting documentation.
- Discuss findings with management and obtain responses.
- Prepare a summary of findings and conclusions.
- Draft the final audit report for stakeholders.
- Check the signatures on each of the financial statements.
- Verify that dates correspond with the reporting period.
- Ensure signatures are from authorized personnel.
- Confirm that electronic signatures comply with regulations.
- Cross-check report conclusions with documented findings.
- Ensure language reflects the level of assurance provided.
- Confirm that any discrepancies are addressed.
- Review for clarity and professionalism.
- Review documentation for resolution of each issue.
- Confirm that management's responses are documented.
- Check for follow-up actions taken.
- Ensure all issues are tracked to closure.
- Examine the management letter for key observations.
- Ensure recommendations are actionable and clear.
- Confirm that management has acknowledged receipt.
- Document any discussions regarding the letter.
- Check compliance with relevant accounting standards.
- Verify that all required disclosures are included.
- Ensure consistency in accounting policies.
- Review any deviations and their justifications.
- Review the notes for clarity on accounting policies.
- Ensure classifications align with industry standards.
- Verify that significant policies are disclosed.
- Confirm that changes in policies are explained.
- Ensure all relevant notes are included.
- Check for completeness in disclosures.
- Verify accuracy of quantitative and qualitative information.
- Assess clarity and readability for stakeholders.
- Schedule a meeting with all audit team members.
- Discuss key findings and gather feedback.
- Ensure all team members agree on conclusions.
- Document any differing opinions for reference.
- Review events that occurred post-reporting period.
- Ensure disclosures are made in the financial statements.
- Assess the impact of these events on the statements.
- Document management's evaluation of subsequent events.
- Check that all engagement documentation is complete.
- Ensure compliance with internal policies and standards.
- Verify that all necessary approvals are obtained.
- Document any deviations from standard procedures.
- Review all supporting schedules for completeness.
- Check for proper organization and easy access.
- Ensure that documentation is retained in compliance.
- Confirm that schedules are up to date.
- Schedule a meeting with management to discuss findings.
- Invite feedback on significant issues raised.
- Document management's responses and action plans.
- Ensure clarity on follow-up responsibilities.
- Draft a concise summary of key findings.
- Ensure clarity and relevance of the summary.
- Distribute the summary to the audit committee.
- Prepare for any follow-up discussions or questions.
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