New ISCA Audit Manual - Converted v3.2

Client:
Year end:
PAF PERMANENT AUDIT FILE INDEX
No. Description
1 Client and/or Engagement Acceptance
1 Client and/or Engagement Acceptance Considerations
1.1 Customer Due Diligence (EP200 IG 2 revised)
1.1A Background Information of the Company (provided by client) (EP200 IG 2 revised)
1.1AA Evaluation of Background Information of the Company (EP200 IG 2 revised)
1.1B Beneficial Owner Declaration (provided by client) (EP200 IG 2 revised)
1.1BB Evaluation of Beneficial Owner Declaration (EP200 IG 2 revised)
1.1C Persons Acting on Behalf of Client (provided by client) (EP200 IG 2 revised)
1.1CC Evaluation of Persons Acting on Behalf of Client (EP200 IG 2 revised)
1.1D Politically Exposed Person (provided by client) (EP200 IG 2 revised)
1.1DD Evaluation of Politically Exposed Person (EP200 IG 2 revised)
1.1E Enhanced Customer Due Diligence (provided by client) (EP200 IG 2 revised)
1.1EE Evaluation of Enhanced Customer Due Diligence (EP200 IG 2 revised)
1.2 Understanding the Entity (provided by client)
1.3 Independence Questionnaire (Initial Engagement)
2 Details of Significant Assets
2.1
3. Significant Long-Term Contracts and Agreements
3.1
Review of updates to PAF
Year File updated by

Ref:
PAF
In use?
Yes No N/A
Reviewed by
Client:
Year end:
Client and/or Engagement acceptance considerations

Yes/No Comments
A. Anti-money laundering consideration
1. Have we obtained all the relevant client declared Customer Due Diligence
(CDD) forms and verified the information provided in the declared CDD form?
If the client is an entity listed in PAF1.1B Annex 1, it is not necessary to identify and
verify the identity of any shareholder or beneficial owner of a client, unless, we have
doubts about the veracity of the CDD information obtained or suspects that the
client, business relations with, or transaction for the client may be connected with
money laundering or terrorist financing activities.
2. Is the Client Risk Rating in PAF1.1 Section E classified as Low/Normal?
(a) For High Risk engagements, have we obtained approval per firm AML policy?
(b) For High Risk engagements, have we completed enhanced CDD?
3. Have we obtained all information on understanding of the entity?
4. Are we satisfied that we have not identified any indicators that the client might
be involved in money laundering or other criminal activities?
5. Are we satisfied that we have not identified any indicators that the client might
lack integrity?
6. Are we satisfied that we have not identified any concerns over the reputation
and attitude of the client’s principal owners, key management, and those charged
with governance towards matters such as aggressive interpretation of accounting
standards and the internal control environment?
7. Are we satisfied that we have not identified any concerns over the identity and
business reputation of the related parties?
8. Based on information obtained, are we satisfied that the company is a bona fide
business?
B. Preconditions for an Audit
1. Is this a statutory audit for a Singapore incorporated entity? If no, consider the
additional requirements in guidance note.
2. Are we satisfied that there is no limitation on scope of the auditor’s work in the If no, do not accept
terms of a proposed audit engagement being imposed by the management or those the engagement
charged with governance, such that the auditor believes the limitation will result in unless required by
the auditor disclaiming an opinion on the financial statements? law or regulation.
C. Independence - Conflict of interest
1. Are we satisfied that acceptance of the engagement would not create any
conflict of interest with existing clients?
2. Are we satisfied that the partners or staff are not associated with any other
practice or organisation which has any dealings with the company that may create a
conflict of interest?
3. Are we satisfied there isn’t any aspects of the client, or other factors, that will
adversely affect the firm's ability to perform the audit properly?
4. Where issues have been identified, are we satisfied that the issues will be
satisfactorily resolved prior to acceptance of the client relationship or specific
engagement?
D. Engagement resources and risk
1. Are we satisfied that we are competent to perform the engagement and have
the necessary resources, including time and capabilities, to do so?
2. Are we satisfied that there are no other reasons why we would not wish to act
for the client (for example financial difficulties, or potential litigation)?
3. Are we satisfied that the acceptance of the appointment would not have an
adverse effect on the reputation of the practice?
4. Are we satisfied that the engagement risk is reasonable and acceptable to the
firm determined in accordance with the firm policies and procedures?
E. Professional clearance
Date of
1. Where another firm has acted as auditor in the previous year, have we written
professional
to the previous auditors for all necessary information and professional clearance?
clearance:
Name of prior auditor:
2. Have we obtained the reason for the proposed audit appointment and non-
appointment of the previous audit firm?
Specify reason: ________________________________

3. Are we satisfied that the client does not possess an aggressive attitude towards
maintaining the professional firm’s fees as low as possible?
Where “no” answer(s) has been given to any of the questions, detail below the action taken and/or mitigating reasons to consider client
acceptance:
Prepared by: Reviewed by:
Date: Date:
Date: Date:
Conclusion
· I am satisfied / not satisfied that procedures regarding the acceptance of this client relationship and audit engagement have been follo
· Based on the information obtained and procedures performed, I recommend / do not recommend the acceptance of the client relations
· The engagement risk classification is: Low / Normal / High.

Engagement Partner:
Date:
Second partner conclusion (where applicable)

I am satisfied / not satisfied that:
· procedures regarding the acceptance of this client relationship and audit engagement have been followed, and
· based on the information obtained, the conclusion reached in the acceptance of the client relationship and audit engagement are approp
Second Partner:
Date:
Summarised specific risks affecting the entity arising from our understanding of the client and
engagement acceptance considerations (Transfer risk to C8.1/C8.2)
Affects risk at overall FS, or Assertions Financial Statements account

Description of risks identified
assertion level? affected affected
Ref:
PAF1
WP Ref
PAF 1.1A-DD
series
PAF1.1
PAF1.1
PAF1.1E - EE
PAF1.2
PAF1.2, PAF1GT
PAF1.1
sons to consider client
ngagement have been followed, and
ptance of the client relationship and audit engagement.

udit engagement are appropriate.
ancial Statements accounts

affected
Client:
Year end:
Guidance Template - CLIENT AND/OR ENGAGEMENT ACCEPTANCE CONSIDERATIONS

A4. Indicators of suspicious transactions
Money launderers use many different and sophisticated types of schemes, techniques and transactions to accomplish their
ends. While it would be difficult to describe all money laundering methodologies, the following are the more frequently observed
signs of suspicions:
Yes No N/A Comments
1. Frequently observed signs of suspicions:
a. Any situation where personal identity is difficult to determine;
b. Introduction of a client by an overseas associate or financial

institution based in a country or jurisdiction known for drug
trafficking and production, other financial crimes and “bank
secrecy”.
The following sets out examples of common indicators of suspicious transactions. Indicators to help establish that a transaction
is related to terrorist financing mostly resemble those relating to money laundering. While each individual indicator may not be
sufficient to suggest that suspicious transaction is taking place, a combination of such situations may be indicative of a
suspicious transaction. The list is intended as a guide and shall not be applied as a routine checklist in place of common sense.
Yes No N/A Comments

2. Common indicators of suspicious transactions.
a. General
· Frequent address changes.
· Client does not want correspondence sent to home address.
· Client uses a post office box or general delivery address, or

other type of mail drop address, instead of a street address when
this is not the norm for that area.
· Client’s home or business telephone number has been
disconnected or there is no such number when an attempt is
made to contact client shortly after he/she has opened an
account.
· Client is secretive and reluctant to meet in person.
· Client insists on a transaction being done quickly.
b. Accountants
· Use of many different firms of auditors and advisers for
connected companies and businesses.
· Client has a history of changing bookkeepers or accountants
yearly.
· Client is uncertain about location of company records.
c. Tax Practitioners
· Client has unusual rise in net worth arising from gambling and
lottery gains.
· Client has unusual rise in net worth arising from inheritance
from a criminal family member.
d. Factors arising from action by the entity or its directors
· Complex corporate structure where complexity does not seem
to be warranted.
3. Where there are ‘yes’ answers above, and the appointment
has been accepted detail below the action taken and reasons,
where necessary:
Ref:
PAF1GT
ONSIDERATIONS
s to accomplish their
more frequently observed
WP ref
ablish that a transaction

al indicator may not be
e indicative of a
place of common sense.
WP ref
Client:
Year end:
CUSTOMER DUE DILIGENCE
Extracted from ISCA EP 200 IG 2 revised June 2017 - Annex 2: Examples of factors to consider in AML/CFT risk assessment
The following sets out examples of factors that professional accountants and professional firms should consider whe
performing risk assessment. These are examples of factors and are not exhaustive.
SECTION A
If the response to any of the statements in Section A is “Yes”, the professional firm shall NOT establish business relationship w
The client is unable to provide all the required information in the relevant forms.
The required information obtained cannot be verified to independent and reliable documents.
The client, beneficial owner of the client, person acting on behalf of the client, or connected party of the client matches the
details in the following lists:
(a) The “Lists of Designated Individuals and Entities” on the MAS website;
(b) The “Terrorist Alert List” on the ISCA website; or
(c) Any other similar lists and information required of professional firms for screening purposes stipulated by relevant
authorities in Singapore including the Accounting and Corporate Regulatory Authority; and
and the exceptions cannot be disposed of satisfactorily.
There is suspicion of money laundering and/or terrorist financing.
“Yes” to any of the questions in Sections B, C and D serves as indicators of higher risk factors. Where there is one o
more “yes” responses, professional judgement must be exercised, with reference to the policies and procedures of th
professional firm, as to the nature and extent of customer due diligence to be carried out. Risk factors should b
discussed with the designated personnel as per the policies and procedures of the professional firm, such as th
Money Laundering Reporting Officer (MLRO).
SECTION B: CLIENT’S RISK FACTORS

Question
Is the client, any of the beneficial owner of the client or person acting on behalf of the client a Politically Exposed Person (PEP)
family member of a PEP or close associate of a PEP?
The professional firm has performed further screening of details of client, beneficial owner of the client, person acting on behalf
of the client, or connected party of the client against other information sources, for example, Google, the sanctions lists
published by the Office of Foreign Assets Control of the US Department of the Treasury, and/or other third party screening
database.
Are there adverse news or information arising?
Is the client in a high-risk industry[1]?
Does the client have nominee shareholder(s) in the ownership chain where there is no legitimate rationale?
Where applicable, do the nominee shareholders represent majority ownership?
Is the client a shell company?

Does the client have unusual or complex shareholding structure (e.g. involving 3 layers or more of ownership structure, differen
jurisdictions, trusts), given the nature of its business?
Is the client a charitable or non-profit organisation that is NOT registered in Singapore (charities.gov.sg/charity/index.do)?
Is the client’s business cash-intensive?
Does the client frequently make unaccounted cash transactions to similar recipients?
Are the client’s company accounts not updated?
Does the client’s shareholders and/or directors frequently change, and the changes are unaccounted for?
SECTION C: COUNTRY / TERRORITY RISK FACTORS

Question
Is the client, beneficial owner of the client or person acting on behalf of the client from or based in a country or jurisdiction in rel
The following would be applicable: nationality, country of incorporation / registration, residential address, registered address,
address of principal place of business.
Is the client, beneficial owner of the client or person acting on behalf of the client from or based in a country or jurisdiction know
The following would be applicable: nationality, country of incorporation / registration, residential address, registered address,
address of principal place of business.
Does the client, beneficial owner or person acting on behalf of the client have dealings in high risk jurisdictions[4]?
SECTION D: SERVICES / TRANSACTIONS RISK FACTORS

Question
Is the business relationship with the client established through online, postal or telephone, where non face-to-face approach is
used?
Has the client given any instruction to perform a transaction (which may include cash) anonymously?
Has the client transferred any funds without the provision of underlying services or transactions?
Are there unusual patterns of transactions that have no apparent economic purpose or cash payments that are large in amount
in which disbursement would have been normally made by other modes of payment (such as cheque, bank drafts etc.)?
Are there unaccounted payments received from unknown or un-associated third parties for services and/or transactions
provided by the client?
Is there instruction from the client to incorporate shell companies with nominee shareholder(s) and/or director(s)?
Does the client set-up or purchase companies or business entities that have no obvious commercial purpose?
This would include:
· Multi-layer, multi-country and complex group structures.
· Setting up entities in Singapore where there is no obvious commercial purpose, or any other personal or economic
connection to the client.
Is there any divergence in the type, volume or frequency of services and/or transactions expected in the course of the business
relationship with the client?
SECTION E: CLIENT RISK RATING
Low – Normal CDD
Normal – Normal CDD
High – Enhanced CDD
Document reasons for client risk rating:
SECTION F: RECOMMENDATION
Accept client
Reject client

Assessed by:
Signature:
Name:
Position:
Date:
Approved by:
Signature:
Name:
Position:
Date:
[1] As determined by the firm, such as with reference to publications and guidance issued from time to time by the FATF.
[2] Refer to the FATF website for list of jurisdictions which the FATF has called for countermeasures.
[3] This can be determined by the professional firm, those notified and required of the firm by relevant authorities, or those id
[4]
Refer to the FATF list of high-risk and non-cooperative jurisdictions to determine which countries are high-risk jurisdictions: http://www.fatf-gafi.org/topics/hig
riskandnon-cooperativejurisdictions/
Ref:
PAF1.1
ionship with the client.

Response
Yes No
Yes No
Yes No
Yes No
Response
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Response
Yes No
Yes No
Yes No
Response
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
or those identified by the FATF.
Client: Ref:
Year end: PAF1.1A
CUSTOMER DUE DILLIGENCE TEMPLATES (DO NOT PROVIDE THIS PAGE TO THE
ENTITY)
Professional firm should consider using the CDD flowchart in EP 200 IG 2 to determine the appropriate CDD forms to be
obtained from the client.
Background
The Institute of Singapore Chartered Accountants (ISCA) issued the new Ethics Pronouncement (EP) 200, Anti-Money Laundering and
Countering the Financing of Terrorism – Requirements and Guidelines for Professional Accountants in Singapore, in October 2014. This
pronouncement has also been adopted by the Accounting and Corporate Regulatory Authority (ACRA) and is applicable to public
accountants and accounting entities registered under the Accountants Act who are regulated by ACRA.
With the objective of supporting the accountancy profession to implement the controls and procedures required in EP 200, ISCA has
developed EP 200 Implementation Guidance (IG) 2 – Illustrative Customer Due Diligence (CDD) Templates to assist professional
accountants and professional firms, specifically in the area of customer due diligence.
The templates and questionnaires provided in EP 200 IG 2 are not prescriptive and should be tailored and adapted for use, as
appropriate for the professional firm’s purposes. Professional firms remain fully responsible for ensuring compliance with AML and CFT
requirements.
MAIN FORM
(For natural persons and sole proprietorships)
Information to be obtained from Client
Information collected in this form should be verified. Verification can be done subsequent to completing risk assessment.
Identification
FOR NATURAL PERSONS/SOLE PROPRIETORSHIPS ONLY

Unique
Full legal name(s), both official
identification
and any aliases:
number:
Contact number(s):
Nationality:
Date of birth:
Residential street address:
Address of principal place of

business (if different from
above):
Intended nature and purpose

of the business relationship:
(Please complete Form A for each beneficial owner.)
Name of beneficial owner(s):
Name of person(s) with (Please complete Form C for each person with executive authority.)
executive authority:
Additional information required
Question Response
Yes No
Are you, or any party connected to you, a politically
(Please complete Form D for
exposed person?
each PEP)
What country is your business based in?
What type of products does your business sell or

manufacture? Please provide further details in the box
below if necessary.
Any further details:

MAIN FORM
(For natural persons and sole proprietorships)
Client/Agent’s Declaration
I declare that the information provided in these forms is true and correct. I am aware that I may be subject to prosecution
and criminal sanctions under written law if I am found to have made any false statement which I know to be false or
which I do not believe to be true, or if I have intentionally suppressed any material fact.
Name of client/agent:
Identity/passport number:
Date:
Signature:
Verification (for office use)
Professional judgment must be exercised in determining if verification of identity should be that of “Normal CDD” or
“Enhanced CDD” standards, depending on the risk assessment performed on the client.
For Normal CDD, the following documents can be used to verify the client’s identity:
Copy of screening results from a reliable independent database (e.g., Thomson Reuters World-Check,
Dow Jones Risk and Compliance database) of the client
Copy of passport or identification card (for Singaporeans and Singaporean Permanent Residents only)
A document containing the address of the individual (e.g., a bank statement or a recent utility bill)
MAIN FORM
(For legal persons)
Information to be obtained from the Client
Identification
FOR LEGAL PERSONS ONLY
Full legal name of registration:
Contact number(s):
Partnership / Limited Liability Partnership / Corporation*

Business type: Other:
*delete where inapplicable
Country of
Registration
incorporation
number/incorporation number:
or registration:
Registered address:

above):
Intended nature and purpose

of the business relationship:
Names of the directors or

partners:
(Please complete Form A for each beneficial owner. Where a beneficial owner cannot be
Name of beneficial owner(s): identified, please complete Form B instead.)
Name of person(s) with (Please complete Form C for each person with executive authority.)
executive authority:
Additional information required
Question Response
No
Yes
Are you, or any party connected to you, a politically
(Please complete Form D for
exposed person?
each PEP)
What country is your business based in?
What type of products does your business sell or

manufacture? Please provide further details in the box
below if necessary.
Any further details:

MAIN FORM
(For legal persons)
Date:
Signature:
Professional judgment must be exercised in determining if verification of identity should be that of “Normal CDD” or
“Enhanced CDD” standards, depending on the risk assessment performed on the client.
For Normal CDD, the following documents can be used to verify the client’s identity:
Dow Jones Risk and Compliance database) of the client
Memorandum and Articles of Association
ACRA profile of the company or incorporation or registration documents from a regulatory body (for
foreign firms) or certificate of incorporation (for foreign firms)
Information documenting the ownership and control structure of the entity (e.g., ownership chart signed
by a director.)
FORM A
(Identification and verification of beneficial owners)
Form A: Beneficial Owners
For each beneficial owner that the client has, please complete the following form. Certain clients do not need to fill up
this form. Please refer to Annex 1 for a list of these clients.
If an ACRA search profile of the shareholders have been obtained, it is not necessary to verify the identity of the
shareholders/partners further. A shareholder may be a beneficial owner if the shareholder ultimately owns or controls
more than 25% of shares in the company.
Identification
BENEFICIAL OWNER
Unique
identification
and any aliases:
number:
Contact number(s):
Occupation:
Nationality:
Date of birth:
Information regarding the

nature of beneficial ownership
and the ownership and control
structure of the client:
*If the beneficial owner is a PEP, Form D must be completed in addition to this form.
Date:
Signature:
Verification of the identity of beneficial owners is to be done on the basis of risk. Reasonable measures should be taken
to verify the identity of the beneficial owners. For example, the following documents can be collected:
Dow Jones Risk and Compliance database) of the beneficial owner
Copy of passport or identification card (for Singaporeans and Singaporean Permanent Residents
only)
FORM B
(For senior managing officials)
Form B: Senior Managing Officials
In the event that no natural persons are identified as the beneficial owners, this form should be completed to
identify and verify the identity of the relevant natural person(s) holding the position of senior managing
official(s).
Identification
SENIOR MANAGING OFFICIAL 1

Unique
identification
and any aliases:
number:
Contact number(s):
Occupation:
Nationality:
Date of birth:
*If the senior managing offical is a PEP, Form D must be completed in addition to this form.
Date:
Signature:
Verification of the identities of senior managing officials is to be done on the basis of risk. Reasonable measures should
be taken to verify the identity of the beneficial owners. For example, the following documents can be collected:
Dow Jones Risk and Compliance database) of the senior managing official
Copy of passport or identification card (for Singaporeans and Singaporean Permanent Residents
only)
FORM C
(Agents)
Form C: Individuals with Executive Authority/Agents
Where a person purports to act on behalf of a client, the professional firm shall identify and verify the identity
of the person and shall verify that the person is so authorised by completing this form.
Identification
FOR AGENTS WHO ARE INDIVIDUALS ONLY
Full legal name(s), both official Unique

and any aliases: identification
number:
Contact number(s):
Occupation:
Nationality:
Date of birth:

above):
FOR AGENTS WHO ARE LEGAL PERSONS

Incorporation
number or
Full legal name of registration:
registration
number:
Contact number(s):
Place of incorporation or
registration:
Date of incorporation or
registration:
Registered address:

above):
*If the agent is a PEP, Form D must be completed in addition to this form.
FORM C
(Agents)
Date:
Signature:
The authority of an agent to act on behalf of the client shall be verified. This may be done by obtaining documentary
evidence that the client has appointed the agent to act on his behalf or a summary of the oral instructions given to the
agent by the client; and the specimen signatures of the person appointed.
FORM D
(PEP)
Form D: Politically Exposed Persons (PEPs)
Where there is one or more PEPs involved, this form must be completed. Please use a separate form for each PEP.
Identification
FOR POLITICALLY EXPOSED PERSON(S) ONLY:
Unique
Name of PEP: identification
number:
Nature of prominent public
function that the PEP is or has
been entrusted with[1]:
Name of public function:
Country:
Period of service:
 Self
 Family member (Spouse / Child / Parent / Child’s Spouse*)
 Close associate
PEP relationship with the  Ultimate beneficial owner / shareholder / director / partner / authorised person* of client
client:  Others (please specify):
*delete where inapplicable
Approximate Amount (SGD)

Annual
Select where appropriate Net Worth
Income
Operating income
Source(s) of wealth: From shareholders
From group companies
Investment
Credit facilities
Others (please specify):
Source of funds:
Date:
Signature:
Documents required for verification

Dow Jones Risk and Compliance database) of the PEP
A document containing the address of the PEP (e.g., a bank statement or a recent utility bill)
Documents verifying the source of funds and wealth[2]
Copy of passport or identification card (for Singaporeans only)
Any published convictions, penalties and sanctions involving the PEP
[1] For example, as a domestic politically exposed person, a foreign politically exposed person, or a politically exposed person of an
international organisation.
[2] Examples of independent verification measures include citing public information sources (e.g. company websites, corporate
registration websites, journals and media reports) to verify net worth as well as obtaining documentary evidence, such as bank
statements, confirmation from third party professionals (e.g. tax advisors), and financial statements or management accounts of
operating companies. Professional firms should also assess the authenticity and reliability of the documents provided by the
clients. More evidentiary verification options are typically required for higher-risk clients. Aside from the common verification measures
such as citing public information sources, some institutions commission independent investigations to perform background checks on
higher-risk PEPs, obtain financial statements of the business(es) where the source of wealth/funds is derived, and perform site visits.
Client:
Year end:
Background information Of the Company (provided by client)

Extracted from ISCA EP 200 IG 2 revised June 2017 - Client Information Form
(Company)
All information requested in this form is required to be

provided in full for client acceptance. The information
declared must be true and correct. Documents to verify the
information will be requested.
SECTION A: COMPANY PARTICULARS
Full legal name:
Former names (if any):
Trading names (if any):
Incorporation / registration
number:
Country of incorporation /
registration:
Date of incorporation /
registration:
Registered address:

registered address):
registered address):
Telephone number:
Email address:
SECTION B: BENEFICIAL OWNER (BO)
This section is not required to be completed for companies that are listed in Annex 1, unless requested by the profes
firm.
1 Does the company have any BO?
A BO is a natural person (whether acting

alone or together) who is either:
- an individual who ultimately owns or
controls the company, whether directly or
indirectly through a chain of ownership; or
- an individual whom the company perform
transactions for or on behalf of.
This includes an individual who exercises or

has the right to exercise significant influence
or control over the company, such as:
- an individual who has an interest in more

than 25% of the shares in the company;
- an individual who has shares with more than

25% of total voting power in the company; or
- an individual who holds the right, directly or

indirectly, to appoint or remove directors who
hold a majority of the voting rights at directors’
meetings.
2
If the response in question 1 above is “Yes”,
(a) please list the full names and aliases, if any, of all the BOs.
1
2
(b) please complete a PAF1.1B for each and

every BO.
3
If the response in question 1 above is “No”,
(a) please list the full names and aliases, if any, of all persons having executive
authority[1] in the company.
(b) please complete a PAF1.1B for each and

every person having executive authority in
the company.
SECTION C: BOARD OF DIRECTORS
Full name (and state aliases, if

Identity card or passport number[2]:
any):
SECTION D: PERSON HAVING EXECUTIVE AUTHORITY[3]
Full name (and state aliases, if

any):
SECTION E: PERSONS ACTING ON BEHALF OF COMPANY[5]
Please list the full names and relationship with the company for all persons acting
1
1 1
2 Please complete a PAF1.1C for each and every person acting on behalf of the com
SECTION F: SCOPE OF
SERVICES
Details of scope of services (if

not set out in a letter of
engagement)
SECTION G: BUSINESS DETAILS
Please provide details of the industry and

1
business (e.g. products / services).
Please provide details of the industry and
1
Which are the primary countries in which

2
the company has dealings with?
Does the company deal with any individual

or entity from the following countries:
- Democratic People’s Republic of

Korea
- Democratic Republic of the Congo
- Eritrea
- Iran
- Libya
3
- Somalia
- South Sudan
- Sudan
- Yemen
If the above is “Yes”, please indicate the

specific countries and the nature of those
dealings.
SECTION H: ADDITIONAL INFORMATION
Any other information requested

by the professional firm as
necessary[6]
Declaration by Person Acting on Behalf of Client[7]
I declare that the information provided in this form is true and correct. I am
aware that I may be subject to prosecution and criminal sanctions under
written law if I am found to have made any false statement which I know to be
false or which I do not believe to be true, or if I have intentionally suppressed
any material fact.
Signature:
Signature:
Name of person acting on behalf

of company:
Position in or relationship with

the company:
Date:
[1] Examples of persons having executive authority in a company include the Chairman and the Chief Executive Offic
[2] Identity card number is preferred where applicable, such as for Singapore citizens and Singapore Permanent Res
[3] Examples of persons having executive authority in a company include the Chairman and the Chief Executive Offic
[5] A person appointed to act on behalf of the client may be an officer of the company who enters into the business r
Ref:
PAF1.1A
PARTICULARS
listed in Annex 1, unless requested by the professional
Yes / No
ve is “Yes”,
ases, if any, of all the BOs.
Full name (and state aliases, if any)

Yes (See PAF1.1B) / NA
ve is “No”,
d aliases, if any, of all persons having executive
Full name (and state aliases, if any)
Yes (See PAF1.1B) / NA

ECUTIVE AUTHORITY[3]
Position in / relationship with company:
ACTING ON BEHALF OF COMPANY[5]
ationship with the company for all persons acting on behalf of the company.
Full Name Relationship

each and every person acting on behalf of the company. Yes (See PAF1.1C) / NA
Yes /No
Client:
Year end:
Evaluation of Background information of the company

Extracted from ISCA EP 200 IG 2 revised June 2017 - Client Information Form (Company)
Use this form to evaluate the background information of the

company in PAF1.1A
FOR OFFICE USE

Verification of client’s details
Verify each of the following details obtained in Section A to the
business profile of the company obtained from the Accounting and
Corporate Regulatory Authority (ACRA) (for Singapore incorporated
companies), or incorporation documents from a regulatory body (for
foreign companies):
- Full legal name
- Former names (if any)
- Trading names (if any)
- Incorporation / registration number
- Country of incorporation / registration
1
- Date of incorporation / registration
- Registered address
- Address of principal place of business (if different from
registered address)
The professional firm may consider accepting documents that are

certified to be true copies by an independent, qualified person, such
as a network firm, a notary public, or an external law firm.
If requested by the professional firm as necessary as per the

professional firm’s policies and procedures, for every director, verify
each of the following details obtained in Section C to the original
identity card or passport (or other independent and reliable
identification document) that bears a photograph of the individual :
- Full Name

- Aliases (if any)
- Identity card or passport (or other identification document)
number
2
If requested by the professional firm as necessary as per the
professional firm’s policies and procedures, for every person having
executive authority in the company, verify each of the following
details obtained in Section D to the original identity card or passport
(or other independent and reliable identification document) that
bears a photograph of the individual:
- Full name
- Aliases (if any)
3
number

Screening
The following details of the client:
- Full legal name
- Trading names (if any)
- Address of principal place of business (if different from
registered address)
4
have been screened, as a minimum, to:
(a) The “Lists of Designated Individuals and Entities” on the Monetary

Authority of Singapore website;
(b) The “Terrorist Alert List” on the ISCA website; and
(c) Any other similar lists and information required of professional
firms for screening purposes stipulated by relevant authorities in
Singapore such as ACRA.
The following details of the Board of Directors:

- Full name
- Aliases (if any)
number

5
5
The following details of the persons having executive authority in the

company:
- Full name
- Aliases (if any)
number

6

Depending on risk assessment, the professional firm may perform

further screening of the details in (4), (5) and (6) above against other
information sources, for example, Google, the sanctions lists
7
published by the Office of Foreign Assets Control of the US
Department of the Treasury, and/or other third party screening
database.
Any exception from (4), (5), (6) and (7) above has been investigated
8
and disposed of appropriately.
Documentary evidence of the screening performed and results,

9 including any investigation and disposition of exceptions have been
retained.
Ref:
PAF1.1AA
Document verified to:
______________
Copy of document retained:
Yes / No
______________
Yes / No
______________
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No / NA
Yes / No
Client:
Year end:
Beneficial owner declaration (provided by client)

Extracted from ISCA EP 200 IG 2 revised June 2017 - Form A Beneficial owner
Please complete this form for each and every beneficial owner (BO) that the company has.
situations where no individual can be identified as a BO, please complete this form for eac
every person having executive authority in the company.
All information requested in this form is required to be provided in full for client acceptanc
information declared must be true and correct. Documents to verify the information will be
requested.
This form is not required for entities that are listed in Annex 1, unless requested by the
professional firm.
SECTION A: PERSONAL PARTICULARS
Full name:
Aliases (if any):
Nationality
(please indicate all
nationalities):
Date of birth:
Residential address:
Telephone number:
Email address:
State reason for being a

BO (e.g. own 30% of
shares of the company):
SECTION B: OCCUPATION / BUSINESS DETAILS
1
1
SECTION C: POLITICALLY EXPOSED PERSON
1
1
Declaration by Person Acting on Behalf of Client[2]

I declare that the information provided in this form is true and correct. I am aware that I may be subject to
prosecution and criminal sanctions under written law if I am found to have made any false statement
which I know to be false or which I do not believe to be true, or if I have intentionally suppressed any
material fact.
Signature:
Name of person acting

on behalf of company:
Position in or relationship
with the company:
Date:
ANNEX 1 - EXEMPTION FOR IDENTIFICATION AND VERIFICATION OF SHAREHOLDERS AND

BENEFICIAL OWNERS, UNLESS REQUESTED BY THE PROFESSIONAL FIRM
Extracted from ISCA EP 200 IG 2 revised June 2017 – Annex 1: Exemption for identification and verification of
shareholders and beneficial owners, unless requested by the professional firm
Unless requested by the professional firm, Form A is not required for entities that are listed below:
(a) An entity listed on the Singapore Exchange;
(b) An entity listed on a stock exchange outside of Singapore that is subject to:
(i) Regulatory disclosure requirements; and
(ii) Requirements relating to adequate transparency in respect of its beneficial owners (imposed
through stock exchange rules, law or other enforceable means);
(c) A majority-owned subsidiary of a company in (a) or (b);
(d) A financial institution that is licensed, approved, registered (including a fund management company
registered under paragraph 5(1)(i) of the Second Schedule to the Securities and Futures (Licensing and
Conduct of Business) Regulations (Rg. 10)) or regulated by the MAS but does not include:
(i) Holders of stored value facilities, as defined in section 2(1) of the Payment Systems
(Oversight) Act (Cap. 222A); and
(ii) A person (other than a person referred to in (e) and (f)) who is exempted from licensing,
approval or regulation by the MAS under any Act administered by the MAS, including a private trust
company exempted from licensing under section 15 of the Trust Companies Act (Cap. 336) read with
regulation 4 of the Trust Companies (Exemption) Regulations (Rg. 1);
(e) A person exempted under section 23(1)(f) of the Financial Advisers Act (Cap. 110) read with
regulation 27(1)(d) of the Financial Advisers Regulation (Rg. 2);
(f) A person exempted under section 99(1)(h) of the Securities and Futures Act (Cap. 289) read with
paragraph 7(1)(b) of the Second Schedule to the Securities and Futures (Licensing and Conduct of
Business) Regulations;
(g) A financial institution incorporated or established outside Singapore that is subject to and
supervised for compliance with AML/CFT requirements consistent with standards set by the FATF; or
(h) An investment vehicle where the managers are financial institutions:
(i) Set out in (d)-(f) above; or
(ii) incorporated or established outside Singapore but are subject to and supervised for
compliance with AML/CFT requirements consistent with standards set by the FATF.
Ref:
PAF1.1B
owner declaration (provided by client)

SCA EP 200 IG 2 revised June 2017 - Form A Beneficial owner
mplete this form for each and every beneficial owner (BO) that the company has. In
where no individual can be identified as a BO, please complete this form for each and
on having executive authority in the company.
tion requested in this form is required to be provided in full for client acceptance. The
n declared must be true and correct. Documents to verify the information will be
s not required for entities that are listed in Annex 1, unless requested by the
al firm.
PERSONAL PARTICULARS
OCCUPATION / BUSINESS DETAILS
What is the individual’s occupation?

What is the individual’s occupation?
If the individual is a business owner, please provide details of the industry and
In the individual’s occupation / business, which are the primary countries in

which the individual has dealings with?
In the individual’s occupation / business, does the individual deal with any
individual or entity from the following countries:
- Democratic People’s Republic of Korea
- Democratic Republic of the Congo
- Eritrea
- Iran
- Libya
- Somalia
Yes /No
- South Sudan
- Sudan
- Yemen
If the above is “Yes”, please indicate the specific countries and the nature of
those dealings.
POLITICALLY EXPOSED PERSON

Is the individual a current or former Politically Exposed Person (PEP)?
PEP means the individual is currently or was formerly entrusted with a

prominent public function in any country. This includes currently serving as or
was formerly:
- a head of state,
- a head of government,
- a government minister (including Second Minister and Minister of State),
- a senior civil or public servant (including Senior Parliamentary Secretary;

Parliamentary Secretary; Permanent Secretary; Second Permanent Secretary;
head of any statutory board; and Chairman or CEO of any government body),
- a senior judicial or military official,

- a senior executive of state owned corporations,
Yes / No
- a senior political party official (Head, Secretary General),
Yes / No
- a member of the legislature (including Members of Parliament (MP),
Nominated MP and Non-Constituency MP), or
- a senior management of an “International Organisations”. This includes

directors, deputy directors and members of the board or equivalent functions
of entities established by formal political agreements between member
countries that have the status of international treaties and whose existence
are recognised by law in member countries. Examples of such entities include
the United Nations and affiliated agencies such as the International Maritime
Organisation and the International Monetary Fund; regional international
organisations such as the Asian Development Bank, Association of Southeast
Asian Nations Secretariat, institutions of the European Union, the
Organisation for Security and Cooperation in Europe; military international
organisations such as the North Atlantic Treaty Organisation; and economic
organisations such as the World Trade Organisation or the Asia-Pacific
Economic Cooperation Secretariat.
Is the individual a “family member” of a current or former PEP?
“Family member” means a parent, step-parent, child, step-child, adopted child,

spouse, sibling, step-sibling and adopted sibling.
Yes / No
Is the individual a “close associate” of a current or former PEP?
“Close associate” means a person who is closely connected to a PEP, either

socially or professionally. Examples include partners outside the family unit
(e.g. girlfriends, boyfriends, mistresses); prominent members of the same
political party, civil organisation, labour union as the PEP; business partners or Yes / No
associates, especially those that share ownership of legal entities with the
PEP, or who are otherwise connected (e.g. through joint membership of a
company board). In the case of personal relationships, the social, economic
and cultural context may also play a role in determining how close those
relationships generally are.
Yes (See
If any of the responses in questions 1, 2 and 3 above is “Yes”, please complete PAF1.1D) /
PAF1.1D.
NA
y Person Acting on Behalf of Client[2]

he information provided in this form is true and correct. I am aware that I may be subject to
nd criminal sanctions under written law if I am found to have made any false statement
o be false or which I do not believe to be true, or if I have intentionally suppressed any
XEMPTION FOR IDENTIFICATION AND VERIFICATION OF SHAREHOLDERS AND

OWNERS, UNLESS REQUESTED BY THE PROFESSIONAL FIRM
SCA EP 200 IG 2 revised June 2017 – Annex 1: Exemption for identification and verification of
d beneficial owners, unless requested by the professional firm
ted by the professional firm, Form A is not required for entities that are listed below:
y listed on the Singapore Exchange;
y listed on a stock exchange outside of Singapore that is subject to:
Regulatory disclosure requirements; and
Requirements relating to adequate transparency in respect of its beneficial owners (imposed

exchange rules, law or other enforceable means);
ty-owned subsidiary of a company in (a) or (b);
al institution that is licensed, approved, registered (including a fund management company

er paragraph 5(1)(i) of the Second Schedule to the Securities and Futures (Licensing and
siness) Regulations (Rg. 10)) or regulated by the MAS but does not include:
Holders of stored value facilities, as defined in section 2(1) of the Payment Systems
t (Cap. 222A); and
A person (other than a person referred to in (e) and (f)) who is exempted from licensing,
gulation by the MAS under any Act administered by the MAS, including a private trust
mpted from licensing under section 15 of the Trust Companies Act (Cap. 336) read with
the Trust Companies (Exemption) Regulations (Rg. 1);
n exempted under section 23(1)(f) of the Financial Advisers Act (Cap. 110) read with
1)(d) of the Financial Advisers Regulation (Rg. 2);
n exempted under section 99(1)(h) of the Securities and Futures Act (Cap. 289) read with
)(b) of the Second Schedule to the Securities and Futures (Licensing and Conduct of
ulations;
al institution incorporated or established outside Singapore that is subject to and

compliance with AML/CFT requirements consistent with standards set by the FATF; or
tment vehicle where the managers are financial institutions:
Set out in (d)-(f) above; or
incorporated or established outside Singapore but are subject to and supervised for
th AML/CFT requirements consistent with standards set by the FATF.
d number is preferred where applicable, such as for Singapore citizens and Singapore Permanent Residents. If identity card or passport nu
ppointed to act on behalf of the client may be an officer of the company who enters into the business relationship with the professional firm/
Client:
Year end:
Evaluation of Beneficial owner declaration

Extracted from ISCA EP 200 IG 2 revised June 2017 Form A – Beneficial owner
Use this form to evaluate beneficial owner declaration in PAF1.1B
FOR OFFICE USE

Verification of individual’s details
Screening
3
4
Identification of PEP
9
Evaluation of Beneficial owner declaration
Extracted from ISCA EP 200 IG 2 revised June 2017 Form A – Beneficial owner
Use this form to evaluate beneficial owner declaration in PAF1.1B
FOR OFFICE USE

Verification of individual’s details
Verify each of the following details obtained in Section A to the original identity card or passport (or
other independent and reliable identification document) that bears a photograph of the individual:
- Full name

- Aliases (if any)
- Identity card or passport (or other identification document) number
- Nationality
- Date of birth
- Residential address
The professional firm may consider accepting documents that are certified to be true copies by an
independent, qualified person, such as a network firm, a notary public, or an external law firm.
Where the identity card or passport (or other independent and reliable identification document)
does not indicate the residential address, verify to other independent and reliable document
containing the residential address of the individual (e.g. an original bank statement or recent utility
bill).
Screening
The following details of the individual:
- Full name
- Aliases (if any)
(a) The “Lists of Designated Individuals and Entities” on the Monetary Authority of Singapore website;

(c) Any other similar lists and information required of professional firms for screening purposes
stipulated by relevant authorities in Singapore such as the Accounting and Corporate Regulatory
Authority.
Depending on risk assessment, the professional firm may perform further screening on details in (3)
above against other information sources, for example, Google, the sanctions lists published by the
Office of Foreign Assets Control of the US Department of the Treasury, and/or other third party
screening database.
Any exception from (3) and (4) above has been investigated and disposed appropriately.
Documentary evidence of the screening performed and results, including any investigation and
disposition of exceptions have been retained.
Search the name (and aliases, if any) of the individual against information sources as per the
professional firm’s policies and procedures, such as Google or other third party screening
databases, to determine if the individual is a PEP, family member of a PEP or close associate of a
PEP.
Where there is a difference between the individual’s declaration in Section C and results from (7)
above, investigate and dispose of any exception appropriately.
Documentary evidence of the search performed and results, including any investigation and
disposition of exceptions have been retained.
Ref:
PAF1.1BB
______________
Yes / No

______________
Yes / No
Yes / No
Yes / No
Yes / No / NA
Yes / No
Yes / No
Yes / No / NA
Yes / No
Client:
Year end:
Persons acting on behalf of client (provided by client)

Extracted from ISCA EP 200 IG 2 revised June 2017 - Form B Person acting on behalf of client
Please complete this form for each and every person appointed by the client to act on behalf of the client[1].
requested.
SECTION A: PERSONAL PARTICULARS
Full name:
Aliases (if any):
Identity card or
passport number[2]:
Nationality
(please indicate all
nationalities):
Date of birth:
Residential address:
Telephone number:
Email address:
SECTION B: POLITICALLY EXPOSED PERSON

Are you a current or former Politically Exposed Person (PEP)?
PEP means you are currently or was formerly entrusted with a prominent
public function in any country. This includes currently serving as or was
formerly:
- a head of state,
- a head of government,
- a government minister (including Second Minister and Minister of
State),
- a senior civil or public servant (including Senior Parliamentary

Secretary; Parliamentary Secretary; Permanent Secretary; Second
Permanent Secretary; head of any statutory board; and Chairman or
CEO of any government body),
- a senior judicial or military official,

- a senior executive of state owned corporations,
- a senior political party official (Head, Secretary General),
- a member of the legislature (including Members of Parliament (MP),

1 Nominated MP and Non-Constituency MP), or
- a senior management of an “International Organisations”. This

includes directors, deputy directors and members of the board or
equivalent functions of entities established by formal political
agreements between member countries that have the status of
international treaties and whose existence are recognised by law in
member countries. Examples of such entities include the United Nations
and affiliated agencies such as the International Maritime Organisation
and the International Monetary Fund; regional international
organisations such as the Asian Development Bank, Association of
Southeast Asian Nations Secretariat, institutions of the European Union,
the Organisation for Security and Cooperation in Europe; military
international organisations such as the North Atlantic Treaty
Organisation; and economic organisations such as the World Trade
Organisation or the Asia-Pacific Economic Cooperation Secretariat.
Are you a “family member” of a current or former PEP?
“Family member” means a parent, step-parent, child, step-child, adopted

child, spouse, sibling, step-sibling and adopted sibling.
Are you a “close associate” of a current or former PEP?
3
“Close associate” means a person who is closely connected to a PEP,
either socially or professionally. Examples include partners outside the
family unit (e.g. girlfriends, boyfriends, mistresses); prominent members of
3 the same political party, civil organisation, labour union as the PEP;
business partners or associates, especially those that share ownership of
legal entities with the PEP, or who are otherwise connected (e.g. through
joint membership of a company board). In the case of personal
relationships, the social, economic and cultural context may also play a
role in determining how close those relationships generally are.
If any of the responses in questions 1, 2 and 3 above is “Yes”, please

4
complete PAF1.1D.
SECTION C: ENTITY PARTICULARS

If the person acting on behalf of the client is a legal entity (e.g. a company), please provide the
following additional information about the legal entity.
Full legal name:
Former names (if

any):
Trading names (if
any):
Incorporation /
registration number:
Country of
incorporation /
registration:
Date of
incorporation /
registration:
Registered address:
Address of principal
place of business (if
different from above):
Telephone number:
Email address:
Declaration by Person Acting on Behalf of Client
I declare that the information provided in this form is true and correct. I am aware that I may be
subject to prosecution and criminal sanctions under written law if I am found to have made any
false statement which I know to be false or which I do not believe to be true, or if I have
intentionally suppressed any material fact.
Signature:
Name of person
acting on behalf of
client:
Position in or
relationship with the
client:
Date:
Ref:
PAF1.1C
n behalf of the client[1].
full for client acceptance. The

y the information will be
Yes / No
Yes / No
Yes / No
Yes / No
Yes (See PAF1.1D) /

NA
Client:
Year end:
Evaluation of Persons acting on behalf of client

Extracted from ISCA EP 200 IG 2 revised June 2017 - Form B Person acting on behalf of client
Use this form to evaluate person acting on behalf of client declaration in PAF1.1C
FOR OFFICE USE

Verification of details of the person acting on behalf of the client
Screening
Individual
3
Entity
10
Verification of authorisation of person acting on behalf of the client
11
11
ion of Persons acting on behalf of client
from ISCA EP 200 IG 2 revised June 2017 - Form B Person acting on behalf of client
s form to evaluate person acting on behalf of client declaration in PAF1.1C
FICE USE
on of details of the person acting on behalf of the client
Verify each of the following details obtained in Section A to the original identity
card or passport (or other independent and reliable identification document) that Document verified to:
bears a photograph of the person acting on behalf of the client:
- Full name

- Aliases (if any)
- Identity card or passport (or other identification document) number Copy of document retained:
- Nationality
- Date of birth
The professional firm may consider accepting documents that are certified to be
true copies by an independent, qualified person, such as a network firm, a notary
public, or an external law firm.

Where the identity card or passport (or other independent and reliable
identification document) does not indicate the residential address, verify to other
independent and reliable document containing the residential address of the
individual (e.g. an original bank statement or recent utility bill).
The following details of the person acting on behalf of the client:

- Full name
- Aliases (if any)
have been screened, as a minimum, to: Yes / No
(a) The “Lists of Designated Individuals and Entities” on the Monetary Authority of
Singapore website;
(c) Any other similar lists and information required of professional firms for
screening purposes stipulated by relevant authorities in Singapore such as the
Accounting and Corporate Regulatory Authority.
The following details of the entity acting on behalf of the client:

- Full legal name
- Trading Names (if any)
- Address of principal place of business (if different from registered address)
Yes / No
(a) The “Lists of Designated Individuals and Entities” on the Monetary Authority of
Singapore website;
(c) Any other similar lists and information required of professional firms for
screening purposes stipulated by relevant authorities in Singapore such as the
Accounting and Corporate Regulatory Authority.
Depending on risk assessment, the professional firm may perform further

screening on details in (3) and (4) above against other information sources, for
example, Google, the sanctions lists published by the Office of Foreign Assets Yes / No
Control of the US Department of the Treasury, and/or other third party screening
database.
Any exception from (3), (4) and (5) above has been investigated and disposed
Yes / No / NA
appropriately.
Documentary evidence of the screening performed and results, including any

Yes / No
investigation and disposition of exceptions have been retained.
ation of PEP
Search the name (and aliases, if any) of the person acting on behalf of the client
against information sources as per the professional firm’s policies and
procedures, such as Google or other third party screening databases, to Yes / No
determine if the person is a PEP, family member of a PEP or close associate of a
PEP.
Where there is a difference between the person’s declaration in Section B and

Yes / No / NA
results from (8) above, investigate and dispose of any exception appropriately.
Documentary evidence of the search performed and results, including any
Yes / No
investigation and disposition of exceptions have been retained.
on of authorisation of person acting on behalf of the client

Verify the authorisation of the person to act on behalf of the client to appropriate
documentary evidence. For example, for an external agent, this could be the
company resolution, letter of appointment or power of attorney. For an officer of
the company, this could be the company resolution; or relying on the professional
firm’s knowledge and judgement given the seniority and responsibilities of the
officer in the company.
Verify the authorisation of the person to act on behalf of the client to appropriate
documentary evidence. For example, for an external agent, this could be the
company resolution, letter of appointment or power of attorney. For an officer of
the company, this could be the company resolution; or relying on the professional Copy of document retained:
firm’s knowledge and judgement given the seniority and responsibilities of the
officer in the company.
Ref:
PAF1.1CC
______________
Yes / No
______________
Yes / No
Yes / No
Yes / No
Yes / No
Yes / No / NA
Yes / No
Yes / No
Yes / No / NA
Yes / No
______________
Yes / No
Client:
Year end:
Politically exposed person (provided by client)

Extracted from ISCA EP 200 IG 2 revised June 2017 - Form C Politically exposed person (PEP)
Please complete this form for each and every client (individual), beneficial owner and pers
acting on behalf of client.
requested.
SECTION A: CATEGORIES OF PEP, FAMILY MEMBER OF PEP

AND CLOSE ASSOCIATE OF PEP
I am a:
PEP
Singapore PEP
Foreign PEP
International Organisation PEP
Family member of PEP

Parent / Step-parent
Spouse
Child / Adopted child / Step-child
Sibling / Adopted sibling / Step-sibling
Close associate of PEP (please describe relationship with the

PEP):_________________________
SECTION B: DETAILS OF PEP

If you are a PEP, please complete the following about yourself. If you are a family member or close associate of a
PEP, please complete the following for the PEP whom you are connected to. If there is more than one PEP,
please use additional PAF1.1D.
Name of PEP:
Name (and description of responsibilities if not self-explanatory from the name) of the prominent public function that
Country / International organisation[3]:

Period of service:
Declaration by Client or Person Acting on Behalf of Client[4]
I declare that the information provided in this form is true and correct.
I am aware that I may be subject to prosecution and criminal
sanctions under written law if I am found to have made any false
statement which I know to be false or which I do not believe to be
true, or if I have intentionally suppressed any material fact.
Signature:
Name of client / person acting on behalf of client:
Position in or relationship with the client:
Date:
[1] International organisation means an entity established by formal political agreements between member countries
[2] For example, Supreme Court judge, finance minister, CEO of a government organisation.
[3] If a PEP of an international organisation, please name the international organisation.
Ref:
PAF1.1D
tically exposed person (PEP)
y client (individual), beneficial owner and person
ired to be provided in full for client acceptance. The

ct. Documents to verify the information will be
urself. If you are a family member or close associate of a

you are connected to. If there is more than one PEP,
From ________________ To
________________
Client:
Year end:
Evaluation of Politically exposed person

Extracted from ISCA EP 200 IG 2 revised June 2017 - Form C Politically exposed
person (PEP)
Use this form to evaluate politically exposed person declaration in PAF1.1D
FOR OFFICE USE
The need for enhanced due diligence on the source of wealth

1 and funds to relevant documents has been considered, as per
the professional firm’s policies and procedures.
2 Document results based on the consideration in (1) above.
If enhanced due diligence on source of wealth and funds has

been assessed as required, perform the due diligence as
required under the professional firm’s policies and procedures;
and document the work performed and results.
3 Note: If such as client, any beneficial owner or any person

acting on behalf of the client is observed to have significant
wealth, or significant amounts of money is involved and linked
to those persons (e.g. transactions or formation of company
involving substantial money), the professional firm should
consider more carefully the need to perform enhanced due
diligence on the source of wealth and funds.
Ref:
PAF1.1DD
son declaration in PAF1.1D
Yes / No
Yes, required / No, not required Document supporting assessment and conclusion
PAF1.1E provides an example of template which may

Yes / No / NA
be used
Client:
Year end:
Enhanced Customer due diligence (CDD) (provided by client)

Extracted from ISCA EP 200 IG 2 revised June 2017 – Annex 3: Example of enhanced CDD relating to source of wealt
ADDITIONAL INFORMATION
Current estimated wealth
(i.e. total assets): S$
Sources of wealth (how you acquired the wealth)

[2]:
Sources of Wealth
Indicate each source of wealth (including past
sources) which contributed to your wealth (e.g.
occupation, investments, inheritance, borrowings,
etc); and estimated amounts generated from each
source.
Source of funds[3]:
Source of funds[3]:
Any other information requested by the

professional firm as necessary:
[1] This form applies to the following individuals where the professional firm determines that enhanced customer due diligence is required:
(a) Client (individual);

(b) Beneficial owner of a company;
(c) Where no individual can be identified as beneficial owner,

the person having executive authority in a company; and
(d) Any other individual the professional firm determines to be

necessary.
Examples of situations where enhanced customer due diligence

may be required include the above individuals identified as:
(a) A foreign PEP, or his family members and close

associates.
(b) A high risk domestic PEP, or his family members and close
associates.
(c) A high risk international organization PEP, or his family
members and close associates.
(d) A high risk individual.
[2] The individual’s wealth refers to his total assets. The source of wealth generally refers to how the individual has acquired the declared wealth (i.
[3] Source of funds refers to the origin of the particular funds or other assets which are the subject of the establishment of business relations (e.g. t
Ref:
PAF1.1E
mple of enhanced CDD relating to source of wealth and funds[1]
RMATION
Details
S$ ____________, of which
S$ ____________ or ____________% is
PEP-related.
S$ ____________, of which
S$ ____________ or ____________% is
PEP-related.
S$ ____________, of which
S$ ____________ or ____________% is
PEP-related.
S$ ____________, of which
S$ ____________ or ____________% is
PEP-related.
S$ ____________, of which
S$ ____________ or ____________% is
PEP-related.
Client:
Year end:
Evaluation of enhanced Customer due

diligence (CDD)
Extracted from ISCA EP 200 IG 2 revised June 2017 – Annex 3: Example of enhanced
CDD relating to source of wealth and funds
Use this form to evaluate enhanced CDD declaration in

PAF1.1E
FOR OFFICE USE

Verify the source of wealth and source of

1 funds to relevant documents as per the
professional firm’s policies[1]. Copy of document retained:
[1] Examples of independent verification measures include citing public information sources (e.g. company websites
Ref:
PAF1.1EE
______________
Yes / No
blic information sources (e.g. company websites, corporate registration websites, journals and media reports) to verify net worth as well as o
CUSTOMER DUE DILLIGENCE TEMPLATES (DO NOT PROVIDE THIS PAGE
TO THE ENTITY) - Guidance
Definitions:
Beneficial owner:
the nature person who ultimately own or control.
it is also include those persons who exercise ultimate effetive control over a legal person/arrangement.
Legal arrangement:
Express trusts or orther similar arrangement.
Legal person:
An entities other than natural person that can establish a permenant relationship with a professional firm or otherwise ow
property.
This can include companies, body corporate, foundations, partnerships, associations and other similar entities.
CLG/NPO
a legal person or arrangement or organisation that primarily engages in raising or
disbursing funds for purposes such as charitable, religious, cultural, educational, social or fraternal purposes, or
for the carrying out of other types of ‘good works’.
The following flowchart illustrates how the CDD process is carried out:
For nature person(S): Complete Main Form for Nature person/Sole proprietor
or
For legal person(s): Complete Main Form for legal person
Does the client qualify for any exemptions? NO For each beneficial owner that the client has,
(see NOTE 1) complete Form A.
(For legal persons) If no beneficial owner is

Yes identified, complete Form B
For each agent that the client has, complete Form C.

Is there one or more politically exposed For each PEP, complete Form D
YES
person(s) involved?
No
Conduct risk assessment using the PAF1.4A Enhanced Customer Due Diligence
High Risk PAF1.4B, 1.4C
Complete PAF1.4 checklist and verify information obtained.
Indicators of Suspicious Transactions

(please refer to EP 200 appendix E for full listing, the following is extraction of common indications)
E1.
a Broadly, transactions that appear inconsistent with a client's known legitimate (business or personal) activities
b Any situation where personal identity is difficult to determine;
c Unauthorised or improperly recorded transactions; inadequate audit trails;
d Unconventionally large currency transactions, particularly in exchange for negotiable instruments or for the dire
e Transactions passed through intermediaries for no apparent business reason;
E2.
The following sets out examples of common indicators of suspicious transactions. Indicators to
help establish that a transaction is related to terrorist financing mostly resemble those relating to
money laundering. While each individual indicator may not be sufficient to suggest that suspicious
transaction is taking place, a combination of such situations may be indicative of a suspicious
transaction. The list is intended as a guide and shall not be applied as a routine checklist in place of
common sense.
E3. Purchase of large cash value investments, soon followed by heavy borrowing against them.
Client asks to hold or transmit large sums of money or other assets when this type of activity is unusual for the
Client frequently exchanges small bills for large ones
Apparent use of personal account for business purposes
Opening accounts when the client’s address is outside the local service area.
Opening an account that is credited exclusively with cash deposits in foreign currencies.
Loans to or from offshore companies
Use of many different firms of auditors and advisers for connected companies and businesses
Client has a history of changing bookkeepers or accountants yearly
Client is uncertain about location of company records.
Company makes large payments to subsidiaries or other entities within the group that do not appear within no
Company shareholder loans are not consistent with business activity.
Complex or unusual transactions, possibly with related parties.
Transactions with little commercial logic taking place in the normal course of business.
Transactions not in the normal course of business.
Transactions where there is a lack of information or explanations, or where explanations are unsatisfactory.
Transactions at an undervalue.
Transactions with companies whose identity is difficult to establish as they are registered in countries known fo
Extensive or unusual related party transactions
Foreign travel which is apparently unnecessary and extensive
Please report to Partner for any suspicious transactions above are identified (refer to EP200 App E for full list), please crea
for suspicious transaction, gather information but not tipping off client
Consider whether the following circumstances are suspicious
( a. for any reason unable to complete the CDD measures; or)
(b. The client is reluctant, unable or unwilling to provide any information requested by the professional accountant, decide
establishing business relations or a pending engagement, or to terminate existing business relations.)
nal firm or otherwise own
milar entities.
purposes, or
NOTE 1:
Unless the professional firm has doubts about the veracity of the CDD information obtain
relations with, or transaction for the client may be connected with money laundering or t
necessary for the professional firm to identify and verify the identity of any shareholder o
is:.
a A Singapore Government entity

b A foreign government entity
c An entity listed on the Singapore Exchange
d An entity listed on a stock exchange outside of Singapore that is subject to reg
e A majority-owned subsidiary of a company in (c) or (d);
he client has, f A financial institution that is licensed, approved, registered (including a fund m
i) Holders
private of stored
trust companyvalue facilities,from
exempted as defined in under
licensing sectionsection
2(1) of15
the
ofPayment
the TrustSC
(Cap. 336) read with regulation 4 of the Trust Companies (Exemption) Regulati
g A
A person
person exempted
exempted under
under section
section 23(1)(f)
99(1)(h)ofofthe
theFinancial
SecuritiesAdvisers Act (Cap.
and Futures 1
Act (C
h Business)
supervisedRegulations;
for compliance with AML/CFT requirements consistent with standa
or
Summary
Forms to be completed by client:
Main form (legal person)
Form A
Form B (if form A not applicable)
Form C (if form A not applicable)
Form D (if there is PEP)
Due Diligence
s or personal) activities or means; unusual deviations from normal account and ransaction;
struments or for the direct purchase of funds transfer services;
ators to
relating to
suspicious
icious
t in place of
tivity is unusual for the client.
do not appear within normal course of business

s are unsatisfactory.
ed in countries known for their commercial secrecy.
for full list), please create a special folder
ional accountant, decides to withdraw from

ns.)
CDD information obtained or suspects that the client, business
h money laundering or terrorist financing activities, it is not
tity of any shareholder or beneficial owner of a client if the client
ore that is subject to regulatory disclosure requirements (e.g., the foreign stock exchanges of FATF member countries);
ered (including a fund management company registered under paragraph 5(1)(i) of the Second Schedule to the Securities and Futures
nsection
2(1) of15
the
ofPayment
the TrustSystems (Oversight)
Companies Act Act (Cap. 222A); and
ies (Exemption) Regulations (Rg. 1);
cial Advisers
rities Act (Cap.
and Futures 110) 289)
Act (Cap. read read
with with
regulation 27(1)(d)
paragraph of the
7(1)(b) Financial
of the SecondAdvisers Regulation
Schedule (Rg. 2); and Futures (Licensing and Cond
to the Securities
s consistent with standards set by the FATF;
e Securities and Futures (Licensing and Conduct of Business) Regulations (Rg. 10)) or regulated by the MAS but does not include:
ures (Licensing and Conduct of

does not include:
Client:
Year end:
Understanding the entity (provided by client)
1. Principal activities of the business (including the type of

products the business sell or manufacture):
2. GST registration number (where applicable):
3. Contact person name:
4. Contact number(s):
5. Information on ownership and control structure of the entity
(i.e. group structure)
A. BANKERS AND PROFESSIONAL ADVISORS

A. Bankers
(1) Name:
Address:
Contact No.:
Email:
B. Lawyers
(1) Name:
Address:
Contact No.:
Email:
C. Other professional service providers (specify)

(1) Name:
Purpose/relationship:
Address:
Contact No.:
Email:
B. lawS and regulations
Reference should be made to specific law and regulation requirements (e.g. CPF Act) and not bland statements, e.g.
employment legislation. Sufficient detail should be recorded to enable our understanding and consideration of the
impact of the laws and regulations on the determination of material amounts and disclosures in the financial statements.
1. Laws and regulations that have direct impact on

financial statements
(e.g. Companies Act; Income tax Act; GST Act; Charities Act;
etc.)
2. General business laws and regulations that have
indirect impact on financial statements
(e.g. NEA; BCA; MOH; URA; etc.)
3. Other specific laws and regulations
(e.g. US PCAOB; UK FRC; etc.)
C. Details of associated companies / related parties

(Alternatively, provide a separate sheet with the relevant details below)
Name of related party
Provide description of internal control procedures in place to ensure completeness of identification and recording of
related party transactions (e.g. a list of related parties, updated annually by the directors, is provided to those
responsible for transaction recording, etc.):
D. Significant accounting policies

Area of accounts
Alternatively, provide a copy of the financial statements for the last 5 (FIVE) years, where available.
E. Significant accounting estimates
Accounting estimate
Provide brief information on how management identifies those

transactions, events and conditions that may give rise to the need
for accounting estimates to be recognised or disclosed in the
financial statements. For example consider:
(a) Provision for impairment of trade receivables.

(b) Inventory obsolescence.
(c) Warranty obligations.
(d) Depreciation method or asset’s useful life.
(e) Carrying value of investments.
(f) Outcome of construction contracts.
(g) Costs arising from litigation.
(h) Share-based payments.
(i) Financial instruments not traded in an active and open market.
How management makes the accounting estimates, and an

understanding of the data on which they are based, including:
(a) the method, including where applicable the model, used in

making the accounting estimate;
(b) relevant controls;
(c) whether management has used an expert;
(d) the assumptions underlying the accounting estimates;
(e) whether there has been or ought to have been a change from
the prior period in the methods for making the accounting estimates,
and if so, why; and
(f) whether and, if so, how management has assessed the effect of
estimation uncertainty.
F. Understanding the business and its environment

1. Business activities and industry of the company
Provide information on the business activities carried out by the company and the industry segment the company is in.
Describe any significant change in operations from prior period.
2. Nature of the entity’s operations

Provide information on the sources of revenue and geographical extent of the operations.
3. Investment
Describe any planned or recently executed acquisitions, mergers or disposal of business, and provide a group structure
of the company.
4. External experts/consultants

Did the company engage any external experts/consultants to provide professional advice/service? If yes, please
describe the nature and purpose of the advice/service.
5. Other matters

Are there any other matters that you would wish to inform us?
G. Overview of the financial reporting system

Objective: To obtain understanding of the entity's system of recording and processing of transactions and to assess its
adequacy as a basis for the preparation of the accounts.
1. Accounting records
Tick as applicable
1. Sales Day Book

2. Cash Receipts Book
3. Sales Ledger
4. Purchase Day Book

5. Cash Payment Book
6. Petty Cash Book
7. Purchase ledger
8. Fixed Asset Register
9. Inventory Ledger
10. Payroll
11. General Ledger
12. Management Accounts
13. Financial Statements
14. Other (specify):
* Complete only when significant to the business.
2. Sales system

Detail below the categories of income and how a sale is first recorded (e.g., an order from phone call, email, sales order, etc.)
3. Purchase system

Detail below the way a liability is first recognised (e.g., a goods received note).)
4. Payroll system

5. Details of computer system
6. Details of outsourced operations (if any)

Ref:
PAF1.2
Email:
y)
n requirements (e.g. CPF Act) and not bland statements, e.g.

orded to enable our understanding and consideration of the
of material amounts and disclosures in the financial statements.
State the legal and regulatory framework that Procedures in place to

affects the entity ensure compliance
evant details below)
Nature of transactions,
Nature of relationship
if any
ce to ensure completeness of identification and recording of

updated annually by the directors, is provided to those
Accounting policy
for the last 5 (FIVE) years, where available.
Basis for arriving at

Basis of identification of estimates
estimate amount
ut by the company and the industry segment the company is in.
r period.
graphical extent of the operations.
, mergers or disposal of business, and provide a group structure
nts to provide professional advice/service? If yes, please

m of recording and processing of transactions and to assess its
s.
Select one: Select one:
Manual Computer-ised Prepared by entity
le is first recorded (e.g., an order from phone call, email, sales order, etc.)
g., a goods received note).)

lect one: Estimated transactions for the whole year
Out-sourced to a
third party
Volume Value ($)
No. of invoices
No. of entries*
No. of customer
accounts
No. of invoices
No. of entries*
No. of accounts
No. of entries*
No. of assets
No. of lines
No. of staff
Frequency:
Client: Ref:
Year end: PAF1.3
INDEPENDENCE QUESTIONNAIRE (INITIAL ENGAGEMENT)

This questionnaire assumes knowledge of the ACRA Code of Professional Conduct and Ethics for Public Accountants and
Accounting Entities. In the case of a financial statements audit, where relevant, all questions should be treated as applying to
all partners and staff in the firm or a network firm and to close members of their family[1].
Yes No
1. Beneficial interests and trusteeships
Do you or any of your staff have any financial involvement in the company in respect of
the following:
(a) Any beneficial interest in shares or other investments?
(b) Any beneficial interest in trusts?
(c) Any trustee investments or nominee shareholdings?
(d) Any trusteeships in a trust that holds shares in an audit client?
2. Loans to or from a client; guarantees; overdue fees

(a) Do you or any of your staff in the firm or a network firm have any loans or
guarantees to or from the client?
(b) Are there any overdue fees for any services?
3. Associated firms
Are you or your staff associated with any other practice or organisation which has any
dealings with the company?
4. Mutual business interest

Do you or any of your partners or staff have any mutual business interests with the
client or with an officer or employee of the client?
5. Family or other personal relationships

Do you or any of your staff have any personal or family connections with the company
and its officers?
6. Ex-partners or senior employees

(a) Has any officer of the company been a partner or senior employee in your
practice?
(b) Is the partner or any senior employee on the audit engagement joining or involved
in substantive negotiations with the client?
7. Provision of other services, specialist valuations and advocacy by the firm or a

network firm
(a) Are any services in relation to the management of the company performed by the
firm or a network firm?
(b) Are any accounting services performed for the company such as preparation of
the statutory accounts from trial balance, bookkeeping or payroll services?
(c) Do the accounts include any specialist valuations carried out by the firm or a
network firm?
[1]
FRS 24 Related Party Disclosures paragraph 9
Yes No
(d) Are the firm or a network firm currently acting for the client as an advocate in any
adversarial proceeding or situation such as a hearing before the tax authorities?
(e) Has the firm or a network firm been involved in the design, provision or
implementation of any IT systems?
(f) Does the firm or a network firm provide advice on taxation matters or undertake tax
compliance work for the client?
(g) Have any other services been provided to the client that may cause a threat to the
firm’s objectivity or independence?
8. Undue dependence on an audit client

(a) Do the total fees for this client/group of clients exceed, or expected to exceed,
15% of firm's total fees?
(b) Are any fees charged to this client/group of clients on a contingent basis?
Which threats apply to this service

Type of service Fee (tick all that apply)?*
SI SR A F I
1. Accounting services
2. Tax services
3. Internal audit services
4. Information technology services
5. Valuation/actuarial valuation services
6. Litigation support services
7. Legal services
8. Recruitment services
9. Remuneration services
10. Corporate finance services
11. Transaction related services
Total Fee
*SI = Self-interest; SR = Self-review; A = Advocacy; F = Familiarity; I = Intimidation
Yes No
9. Goods and services: hospitality
Have you or any of your staff accepted any material goods or services on favourable
terms or received undue hospitality from the company?
10. Litigation
Is there any actual or threatened litigation between yourself and the client in relation to
fees, audit work, or other work?
SAFEGUARDS
Where any of the above questions have been answered 'yes', specify what safeguards are proposed to
maintain integrity and independence, and to ensure the availability of resources and the ability to perform
the audit properly.
CONCLUSION
Having regard to any safeguards identified above, I am satisfied that appropriate procedures regarding the
acceptance of this client relationship and audit engagement have been followed, and that the conclusions
reached in this regard are appropriate and have been properly documented. In arriving at this conclusion I
confirm that I have:
(a) obtained all relevant information from the firm (and where applicable network firms) to identify and
evaluate circumstances and relationships that may create a threat to independence;
(b) evaluated information on identified breaches, if any, of the firm's independence policies and procedures
to determine whether they create a threat to independence for this audit engagement;
(c) taken appropriate action to eliminate such threats or reduce them to an acceptable level by applying
safeguards; and
(d) documented the conclusion on independence and any relevant discussions within the firm that support
this view.
Engagement Partner:
Date:
CONSULTATION (to be completed where appropriate)
In my opinion the steps proposed are sufficient to maintain independence and to ensure the availability of resources and
the ability to perform the audit properly.
Second Partner:
Date:
Client: Ref:
Year end: PAF1.4A
Anti-Money Laundering / Countering the Financing of Terrorism (AML/CFT)

Risk Assessment Form
For existing clients only (leave this field blank if not applicable): Response
Routine review of existing client Yes No
Review as a result of a trigger event – Please indicate the trigger event: Yes No
For existing clients only (leave this field blank if not applicable): Response
Referred client – Please indicate source of referral below: Yes No
Please provide details regarding the nature of services required by client :
Establishing or continuing business relationship with the client is NOT allowed if the answer to any
of the questions below is "NO."
Questions Response
For new client, up-to-date and relevant client identification Yes No N/A
information, including information on shareholders and
directors, has been obtained as per Page 1.
For existing client, no doubt arises as to the veracity or Yes No N/A

adequacy of the evidence previously obtained for the purposes
of client identification; otherwise, client identification information
has been re-verified.
Client and connected parties[2] DO NOT MATCH with terrorist Yes No

suspects and/or special interest entities in reliable, independent
screening databases[3] .
Client and connected parties DO NOT MATCH with any of the Yes No
names under the list of names under the applicable Schedules
of the Terrorism (Suppression of Financing) Act (Cap. 325) and
United Nations sanctioned entities.
If the answer to any of the following questions is "Yes”, the business relationship must be either
terminated or declined. If the answer is “No”, the risk level is “Normal” and you may proceed to the
risk assessment questionnaire.
Questions Response
The ownership of the client is unable to be verified (i.e. comparing information Yes No
based on documents).
Certain services are subject to additional requirements under the Ethics Pronouncement 200 and CSP Guidelines.
[1]
Please see Annex 2 for a list of these services.

Connected parties may be family members or close associates (e.g. individuals closely connected either socially or
[2]
professionally).
Possible databases you may use are Accuity Compliance, Thomson Reuters World-Check, Dow Jones Risk &
[3]
Compliance Database and Truth Technologies’ Sentinel.

Risk Assessment Questionnaire
Section 1: Client background
Questions Response
Client or beneficial owners[4]or directors is a Politically Exposed Person (PEP). Yes No
Client or beneficial owner or directors is matched with a person in the MAS Yes No
control list.
The issues are related to predicate crimes for money laundering and/or fraud Yes No
and/or crime (including suspected cases).
Client or beneficial owner or connected party has adverse news based on Yes No
searches from Factiva and/or Google.
The issues are related to predicate crimes for money laundering and/or fraud Yes No
and/or crime (including suspected cases).
Client is involved in High-Risk Industry[5]. Yes No

Client has nominee shareholder/s in the ownership chain where there is no Yes No
legitimate rationale.
The nominee shareholder/s represent/s majority ownership Yes No
Client is: Yes No

- a shell company or has complex shareholding structure (e.g., involving 3
layers or more of ownership structure, different jurisdictions, trusts); AND
- without an obvious commercial purpose.
Client is a charitable or non-profit organisation that is NOT registered in Yes No

Singapore (charities.gov.sg/charity/index.do).
Section 2: Client Location
Please consider as applicable: Client nationality; Place of formation/incorporation; Residential address;

Permanent address; Place of operation; Place where business is established.
Questions Response
Client or beneficial owner or beneficiary is connected to high risk
Yes No
jurisdictions[6] in any of the above listed aspects.
Client or beneficial owner or beneficiary is connected to a jurisdiction not in a
Yes No
low risk country[7].
Section 3: Client Meeting
Questions Response
Client relationship is established through a non-face-to-face approach. Yes No
Client relationship is established through online, postal or telephone, where Yes No
non face to face approach is used.
Client relationship is not established through referral. Yes No
[4]
A beneficial owner refers to the natural person who ultimately owns or controls a client and/or the natural person on whose behalf a
transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or
arrangement.
[5]
As determined by the firm, such as with reference to publications and guidance issued from time to time by the FATF.
Refer to the FATF list of high-risk and non-cooperative jurisdictions to determine which countries are high-risk jurisdictions:
[6]
http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/
Determining whether a country is low-risk should be based on the firm’s internal policy and your professional judgement. Reference
[7]
should be made to the FATF list of high-risk countries as well.
(where applicable) Higher Low6

Client relationship is established through referral by a member firm in a risk/not in a
jurisdiction that is: ________________________________. low risk
country
The member firm does not have equivalent AML/CFT measures that are able Yes No
to mitigate the risks of being from a higher risk country.
*CDD documents must be obtained from the member firm
“Yes” to any of the questions in Sections 1, 2 and 3 serves as an indicator of higher risk. Where there is one
or more “yes” responses, professional judgement, with reference to the policies and procedures of the
professional firm, must be exercised as to the nature of the Customer Due Diligence to be carried out.
Please discuss any risk factor with the Money Laundering Reporting Officer (MLRO).
The following is only where the client is, or is associated with, a PEP.
PEP risk factors:

Expected receipt of large sums from governmental bodies or state-owned entities
Source of wealth described as commission earned on government contracts
Request to associate any form of secrecy with a transaction
Use of accounts at a government-owned bank or government account as source of funds
None of the above
Other (Please Specify):
Section 4: Risk Evaluation
Initial CDD procedures should be conducted as follows:

-“Low” risk rating: Simplified CDD should be performed.
- “Normal” risk rating: Normal CDD should be performed.
-“High” or “Medium” risk rating: Enhanced CDD should be performed.
The following risk evaluation is to assist in determining what level of ongoing monitoring and CDD should
be conducted.
Instructions
1 Obtain an initial risk rating, being the highest risk indicator in Section 1.
2 Provide justifications in Section 2 to adjust the initial risk rating in Section 1, if considered justifiable, subject
to the following conditions:
- High risk rating should NOT be reduced if Client is attached to any of the following risk factors: Section 1 :
PEP, Section 2 : High-Risk Jurisdictions
- Justifications must also be provided for adjustment from High-Risk to Low-Risk in Section 3
Section 1 : Current risk rating of existing client; OR Initial risk

rating for new client or existing client with no previous risk High Normal Low
rating
Section 2 : Justifications
Section 3 : Justifications
Section 4 : Final Risk Rating High Normal Low
Section 4 is to be signed off by the Money Laundering Reporting Officer (MLRO) if it differs from
Section 1.
The final risk rating may be used as a guide to the level of ongoing monitoring that the client should be
subject to. This only serves as a guide and professional judgement should still be exercised in deciding on
the appropriate level of ongoing monitoring and CDD processes.
Section 5: Recommendation
Additional approvals may be needed for higher-risk factors.
Business relationship Establish Maintain Decline Terminate
“Terminate” action should be discussed with the MLRO to decide appropriate further action.
Assessed by:
Signature: Date:
Name: Position:
Approved by:
Signature: Date:
Name: Position:
source of funds
Client: Ref:
Year end: A
A AUDIT COMPLETION
Please tick where applicable

No. Description Yes No N/A
1 Final completion memorandum
1.1 Final completion checklist
1.2 Final review – Subsequent events and going concern
1.3 Second partner review
Current year cross-referenced financial statements –
2
PLACEHOLDER
2.1 Review of financial statements
Current year AJE / RJE and late client adjusting entries passed
2.2
– PLACEHOLDER
Current year revised management trial balance after adjusting
2.3
entries – PLACEHOLDER
3 Management representation letter
4 Audit highlights
4.1 Final analytical review
5 Schedule of uncorrected misstatements
6 Justification of audit opinion
Notes of closing meeting with management / those charged
7
with governance
Current year letter of comments to management / those
8
charged with governance
9 Points carried forward to next year's audit – PLACEHOLDER

Client: Ref:
Year end: A1
FINAL COMPLETION MEMORANDUM
APPROVAL FOR SIGNING THE AUDIT REPORT
I confirm that:
1. The audit complies with professional standards and the applicable legal and regulatory requirements.
2. In particular, the audit complies with all relevant requirements of the SSAs.
3. A sufficient and appropriate record for the basis of the audit report has been documented.
4.
There are no factors to indicate that the representations received from the directors cannot be relied upon.
5. All outstanding matters on A4 have been resolved.

6. Subsequent events review has been updated. We have performed the procedures required to cover the
period from the date of the financial statements to the date of the auditor’s report, or as near as practicable
thereto.
7. The auditor's report issued is appropriate in the circumstances. The auditor’s report is dated no earlier than
the date on which sufficient appropriate audit evidence to support the auditor’s opinion on the financial
statements has been obtained. The evidence include:
(a) All statements that comprise the financial statements, including the related notes, have been prepared;
and
(b) Those with recognised authority have asserted that they have taken responsibility for those financial
statements.
8. Where a second partner review is involved, the second partner review is completed on or before the date of
the auditor’s report.
I authorise the issue of the audit report.
Audit engagement partner: Second partner (where applicable):
Date: Date:
Client: Ref:
Year end: A1.1
FINAL COMPLETION CHECKLIST
Y/N/NA Comments WP Ref

1.
Have all outstanding items in A4 been adequately dealt with?
2. Was a signed letter of representation (A3) addressed to the

firm dealing with at least the specific issues required by the
SSAs received from management?
3.
Is the letter of representation dated as near as practicable to
but not after the expected date of the audit report; and do the
representations include all those that relate to all financial
statements and all periods referred to in the report?
4. Where fraud was found or suspected, was this and any other
relevant information communicated to the appropriate level of
management and those charged with governance on a timely
basis?
5. Is the engagement team satisfied that the directors'
representations can be relied upon?
6. Does the file contain adequate justifications of the audit opinion
A6?
7.
Has the engagement team informed the directors of any
unadjusted misstatements, any material weaknesses in the
accounting and internal control systems, or any other relevant
matters relating to the audit?
8. Has the Final Review – Subsequent Events and Going
Concern programme in A1.2 been completed? (Date latest
review completed _________________)
9. Do the working papers and the tax computations reflect final
adjustments A2.3?
10.
Has the final copy of the financial statements (A2) been cross-
referenced to the audited lead schedules?
11. Will the archival of the file be completed on a timely basis,

ordinarily not more than 60 days, after the date of the audit
report?
12. Is the engagement team satisfied that it is appropriate to seek
re-appointment as auditors A6?
Date: Date:
Client: Ref:
Year end: A1.2
FINAL REVIEW – SUBSEQUENT EVENTS AND GOING CONCERN
Results
satisfactory Comments WP Ref
(Y/N)
General
1.
Read the management minutes obtained since the final audit up
to the date of the auditor’s report and enquire about matters
discussed at meetings for which minutes are not available (A7).
2. Review any available accounting records produced after the

period end and determine if adjustments are required in the
financial statements.
3. Enquire with management and document if any subsequent
events have occurred which might affect the financial
statements. Consider the following:
(a) the current status of items involving judgement or which

were accounted for on the basis of preliminary data as follows:
(b) whether new commitments, borrowings or guarantees have

been entered into;
(c) whether sales or acquisition of assets have occurred or are

planned;
(d) whether the issues of new shares or debentures, or an

agreement to merge or to liquidate, has been made or is
planned;
(e) whether any assets have been appropriated by the

government or destroyed (e.g. by fire or flood) ;
(f) whether there have been any developments regarding risk
areas, litigations, claims and contingencies;
(g) whether any unusual accounting adjustments have been
made or are contemplated;
(h) whether any events have occurred or are likely to occur
which might cast significant doubt on the entity’s ability to
continue as a going concern;
(i) whether events have occurred that are relevant to the
measurement of estimates or provisions; and
(j) whether any events have occurred that are relevant to the
recoverability of assets.
4. Consider, where appropriate, the validity of the going concern
basis of accounting.
5. Confirm that the directors’ review of the future of the business
still extends to a period of at least 12 months from the date of
the accounts.
6. Enquire and document facts which become known to the auditor
after the date of the auditor’s report but before the date the
financial statements are issued.
Date: Date:
Client: Ref:
Year end: A1.3
SECOND PARTNER REVIEW (where applicable)

1.
Perform an objective evaluation of the significant judgement
made by the engagement team, and the conclusions reached in
formulating the auditor's report including:
(a) Evaluate the engagement team's and the firm's

independence in relation to the client;
(b) Review the audit planning documents;
(c) Review accounts involving significant judgement and

estimates and the conclusions reached. Consider:

been entered into;
(i) Significant risks identified during the engagement and the
responses to those risks;
(ii) Judgement made, particularly with respect to materiality and

significant risks;
(iii) The significance and nature of corrected and uncorrected

misstatements identified during the audit;
(iv) The matters to be communicated to management and those

charged with governance and, where applicable, other parties
such as regulatory bodies;
(d) Evaluate the conclusions arising from formal consultations, if

applicable, are appropriate for matters involving differences of
opinion or other difficult or contentious matters;
(e) Review the audit documentation for appropriate conclusions

reached especially in areas involving significant judgement and
estimates; and
(f) Review the financial statements and evaluate the

conclusions reached in formulating the auditor's report and
consider whether the proposed audit opinion is appropriate.
I confirm that:
1.
The procedures required by the firm's policies on engagement quality control review have been performed.
2.
The engagement quality control review has been completed on or before the date of the auditor's report.
3. I am not aware of any unresolved matters that would cause me to believe that the significant judgement
made and conclusion reached were not appropriate.
Second partner:
Date:
Client: Ref:
Year end: A2
CURRENT YEAR CROSS-REFERENCED FINANCIAL STATEMENTS –

PLACEHOLDER
The auditor’s documentation shall demonstrate that the financial statements agree or reconcile with the underlying
accounting records. The procedures to test the final cross-referenced financial statements are found in D4.
Client: Ref:
Year end: A2.1
REVIEW OF FINANCIAL STATEMENTS

A. Reasonableness of financial statements
1.
Consider comparison of the results for the current period with:
(a) information for prior periods;
(b) those expected in budgets or forecasts;
(c) the auditors’ expectation;
(d) other companies of comparable size in the same industry;

and
(e) overall industry or sector statistics.

2. Consider relationships between
(a) elements of financial information that would be expected to
conform to a predictable pattern based on the company's
experience, such as gross margin percentages; and
(b) financial information and relevant non-financial information,

such as payroll costs to number of employees.
3. Consider the reliability of the information used to perform

analytical review procedures and whether this has been verified
as part of the audit process.
4.
Consider whether any expectation or comparison used is
sufficiently precise to identify material misstatements.
5.
In respect of accounting estimates, consider whether:
(a) they are consistent with other audit evidence obtained during
the audit;
(b) there is any indication of management bias;
(c) they are disclosed in accordance with the applicable
accounting framework; and
(d) for high risk estimates, there is adequate disclosure of

6. Consider whether any unusual or unexpected relationships that
have been identified, including those related to revenue
accounts, may indicate risks of material misstatement due to
fraud.
B. Presentation and applicable financial reporting framework
1. Review accounting policies to determine whether they:
(a) are in accordance with the applicable accounting
framework;
(b) are consistent with those of the previous period;
(c) are consistently applied to similar transactions;
(d) are appropriate to the nature of the client's business; and
(e) are properly disclosed in accordance with the requirements

of relevant accounting standards.
2.
Consider whether the financial statements adequately reflect:
(a) the substance of underlying transactions and balances and

not merely their form; and
(b) the information and explanations obtained and conclusions

reached during the audit;
Document points of interest on A4 Audit Highlights

3.
Did the substantive procedures undertaken include agreeing the
financial statements to the underlying records and a review of
material journal entries?
4. Consider whether the review reveals any new factors, which
may affect the presentation of information or disclosures in the
5.
Review the financial statements for proper preparation in
accordance with the applicable accounting framework.
6.
State whether a disclosure checklist has been completed in
respect of the current year audit.
7.
Where a checklist was not completed in the current year,
explain how sufficient appropriate evidence concerning the
disclosure objectives has been obtained.
8.
Consider whether the information contained in the directors'
report and any other document issued with the financial
statements is consistent with the accounting information in the
financial statements and has not been unduly influenced by the
directors' desire to present matters in a favourable or
unfavourable light.
9. Conclude on the overall reasonableness and presentation of the

Date: Date:
Client: Ref:
Year end: A2.2
CURRENT YEAR AJE/RJE AND LATE CLIENT ADJUSTING ENTRIES PASSED –

PLACEHOLDER
Date: Date:
Client: Ref:
Year end: A2.3
CURRENT YEAR REVISED MANAGEMENT TRIAL BALANCE AFTER ADJUSTING

ENTRIES – PLACEHOLDER
Date: Date:
Client: Ref:
Year end: A3
SAMPLE MANAGEMENT REPRESENTATION LETTER
(To Prepare Using Entity Letterhead)
(Date)
(To Auditor)
Dear Sir
This representation letter is provided in connection with your audit of the financial statements of SME Pte Ltd for the year
ended 31 December 20X6 for the purpose of expressing an opinion as to whether the financial statements give a true
and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial
Reporting Standards.
We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary
for the purpose of appropriately informing ourselves:
Financial Statements
· We have fulfilled our responsibilities, as set out in the terms of the audit engagement dated [insert
date], for the preparation of the financial statements in accordance with the provisions of the Singapore
Companies Act, Chapter 50 (the “Act”) and Singapore Financial Reporting Standards, in particular the
financial statements give a true and fair view in accordance therewith.
· Significant assumptions used by us in making accounting estimates, including those measured at fair
value, are reasonable.
· Related party relationships and transactions have been appropriately accounted for and disclosed in
accordance with the requirements of Singapore Financial Reporting Standards.
· All events subsequent to the date of the financial statements and for which Singapore Financial
Reporting Standards require adjustment or disclosure have been adjusted or disclosed.
· The effects of uncorrected misstatements are immaterial, both individually and in the aggregate, to
the financial statements as a whole. A list of the uncorrected misstatements, marked as Appendix A, is
attached to the representation letter.
· [Any other matters that the auditor may consider appropriate.]
Information Provided
· We have provided you with:

o Access to all information of which we are aware that is relevant to the preparation of the financial
statements such as records, documentation and other matters;
o Additional information that you have requested from us for the purpose of the audit; and
o Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit
evidence.
· All transactions that should have been recorded have been recorded in the accounting records and
are reflected in the financial statements.
· We acknowledge our responsibility for the design and implementation of internal control to prevent
and detect fraud or error. As we have disclosed to you before, the results of our assessment of the risk that
the financial statements may be materially misstated as a result of fraud is [low/medium/high].
· We have disclosed to you that we are not aware of any information in relation to fraud or
suspected fraud that we are aware of and that affects the entity and involves:
o Management;
o Employees who have significant roles in internal control; or
o Others where the fraud could have a material effect on the financial statements.
· We have disclosed to you that we are not aware of any information in relation to allegations of
fraud, or suspected fraud, affecting the entity’s financial statements communicated by employees,
former employees, analysts, regulators or others.
· We have disclosed to you that we are not aware of any known instances of non-compliance or
suspected non-compliance with laws and regulations whose effects should be considered when
preparing financial statements.
· We have disclosed to you that we are not aware of any non-compliance with AML and CFT
legislations.
· I declare that the information provided in these forms is true and correct. I am aware that I may
be subject to prosecution and criminal sanctions under written law if I am found to have made any false
statement which I know to be false or which I do not believe to be true, or if I have intentionally
suppressed any material fact.
· We have disclosed to you the identity of the entity’s related parties and all the related party
relationships, transactions and balances of which we are aware of as follows:
Name of related party Nature of relationship Transactions and Balances
· [Any other matters that the auditor may consider necessary.]
Director
Client: Ref:
Year end: A4
AUDIT HIGHLIGHTS
A. Background information
1.
Give details of any change in background information since the planning memorandum was approved.
For example:
(a) Significant improvements/deterioration in the company’s trading position/results post year end;
(b) Any new industry, regulatory and other external factors affecting the company;
(c) Changes to shareholders, directors or other key staff;
(d) New accounting systems or changes in controls and/or procedures; and
(e) New related parties or significant new related party transactions.
B. Audit Strategy
1. Give details to (and cross-reference to) any changes in background information since the planning
memorandum was approved.
2. Evaluate final audit materiality per C3. Where there are changes in overall materiality from the level set at
the planning stage, explain how we have addressed the effect of the difference.
3.
Explain any departure from the requirements of SSAs and how the alternative audit procedures performed
achieve the aim of that requirement. Document the effect on the audit opinion (see A6).
C. Results of audit procedures and responses to risks:

1. Explain the results of audit procedures in response to risks identified at the planning stage.
Consider:
(a) Significant risks at financial statement level;
(b) Significant risks at assertion level; and
(c) Other fraud risks
2. Explain the approach to risks not identified at the planning stage including:
(a) The nature of the risk and the assertions affected;

(b) The audit procedures undertaken; and
(c) The results of those procedures.
3. Summarise:
(a) The basis for conclusions about the reasonableness of accounting estimates and their disclosures;
(b) Indicators of possible management bias, if any; and

(c) The effect of any non-compliance with laws and regulations.
4. Where information identified is inconsistent with previously drawn conclusions, explain the circumstances
and how this was resolved.
5.
Explain any departure from the requirements of any FRSs and how the engagement team addressed the
effect of that departure, including consideration of the effect of departure on the audit opinion.
D. Uncorrected misstatements
Summarise any significant uncorrected misstatements recorded in A5 and conclude as to whether or not
adjustment is required.
E. Deficiencies in internal control

Summarise any deficiencies in internal control recorded in A8 and consider the effect of such deficiencies
in internal control on the audit (i.e. whether adjustment is required and/or effect on the audit opinion).
F. Fraud
1. Consider whether any information obtained indicates risks of material misstatement due to fraud.
2. Where there are indicators of fraud:

(a) Evaluate the implications of the misstatement in relation to other aspects of the audit;
(b) Consider the reliability of management representations;
(c) Recognise that an instance of fraud is unlikely to be an isolated occurrence;
(d) Consider whether management are involved and if so, the implications for the risk assessment and on
the nature,
(e) timing
Consider and extent
whether there isofevidence
audit procedures undertaken;
of collusion involving and
employees, management and third parties
and the effect on the reliability of evidence obtained.
G. Anti-money laundering and countering the financing of terrorism considerations – Ongoing

Monitoring
1. Are there any changes in control and/or ownership, material change in level, type or conduct of business,
changes in circumstances or nature of services provided? If yes, update existing records of customer due
diligence process and keep them up-to-date.
2. Based on knowledge of the client and information collected, is there any reasonable ground for suspicion
that existing business relations with a client are connected with money laundering or terrorist financing? If
yes, consider if it’s appropriate to retain the client.
H. Related parties
Summarise the work concerning any previously unidentified related parties, any transactions with those
parties, or any other transactions outside the normal course of business.
I. Subsequent events and going concern
1. Comment on any significant subsequent events found and whether any adjustment or disclosure is
required.
2. Comment on any conditions that, individually or collectively, may cast significant doubt on the entity's
ability to continue as a going concern.
J. Other
Describe any inconsistencies found between the financial statements and the directors' report or other
information published with the financial statements. Explain any additional work undertaken and the
conclusions reached.
K. Outstanding matters
The audit is substantially completed except for (the following items/Appendix A attached). We will include
the items in our closing meeting discussion with management for their prompt resolution (A7).
L. Client/engagement continuance
1. Have we obtained any information that would have caused us to decline the client/engagement had that
information been available earlier? (Yes/No) For yes, proceed to 2. For no, proceed to 3.
2. Comment on any conditions that, individually or collectively, may cast significant doubt on the entity's
ability to continue as a going concern.
If yes,
(a) Have we considered the professional and legal responsibilities that apply to the circumstances,
including whether there is a requirement for the firm to report to the person or persons who made the
appointment or to regulatory authorities?
(b) Have we considered the possibility of withdrawing from the engagement or both the engagement and
the client relationship?
3. Are there any significant matters that have arisen during the current or previous audit engagement with
implications for continuing the relationship?

Date: Date:
Client: Ref:
Year end: A4.1
FINAL COMPLETION CHECKLIST
Comments WP Ref
1. Consider comparison of the results for the current period with:
(b) those anticipated in budgets or forecasts;
(c) the auditor’s expectations; and
(d) other companies of comparable size in the same industry.
2. Consider relationships between:
(a) elements of financial information that would be expected to
conform to a predictable pattern based on the entity's experience,
such as gross margin percentages; and
(b) financial information and relevant non-financial information, such
as payroll costs to number of employees.
3. Consider the reliability of the information used to perform analytical
review procedures and whether this will be verified as part of the audit
process.
4. Where applicable make a final assessment of the reasonableness of
the entity’s accounting estimates based on understanding of the entity
and its environment.
5. Consider whether the accounting estimates are consistent with other
audit evidence obtained during the audit.
6. Consider whether there are any indicators that the client might be
involved in money laundering or other criminal activities.
Date: Date:
Client:
Year end:
Guidance Template – Final analytical review

Final analytical review template
CY
Balance sheet Ref % change from PY1 PY1 (Audited)
(Final)
Current assets
Cash and bank balances A
Trade receivables B
Other receivables C
Inventories D
Investments E1
Total current assets F
Non-current assets
Investments E2
Property, plant and equipment G
Total non-current assets H
Total assets I
Current liabilities
Trade payables J
Other payables K
Loans and borrowings L1
Income tax M
Total current liabilities N
Non-current liabilities
Loans and borrowings L2
Total non-current liabilities O
Total liabilities P
Net assets Q
Equity
Share capital R
Retained earnings S
Total equity T
CY
Profit or loss Ref % change from PY1 PY1 (Audited)
(Final)
Revenue AA
i. Credit sales AA1
ii. Cash sales AA2
*Cost of goods sold AB
Gross profit AC
*Marketing expense AD
*Distribution expense AE
*Administrative expense AF
*Financing costs AG
*Other expense AH
*Other income AI
Profit before tax AJ
*Tax expense AK
Profit after tax AL
Generally, the effectiveness of analytical procedures increases when the analysis is performed based on disaggregated, rather th
engagement should consider obtaining further disaggregated information, such as breakdown of information per the notes to the f
(and also consider obtaining relevant non-financial information) to better evaluate the relationship of the financial information.
* Consider performing analysis based on the detailed profit or loss information
CY
Ratio (including but not limited to) Formula % change from PY1 PY1 (Audited)
(Final)
Debtors turnover [Credit sales/Average
AA1 ÷ Average B
Trade receivables]
365 days ÷ Debtors
Debtors turnover days
turnover
Average credit terms to debtors -
Creditor turnover [Purchases/Average

AB÷ Average J
Trade payables]
Average credit terms from creditors -
Inventory turnover [COGS/Average

AB÷ Average D
Inventories]
Current ratio [Current assets/Current
F÷N
liabilities : 1]
Quick ratio (F-D)÷N
Gearing ratio [Total debt/total equity] (L1+L2) ÷T
Gross profit margin (%) AC÷AA

Net profit margin (%) AL÷AA
Ratio Analysis
Ratio What it means
The number of times that the accounts receivables get turned over per year. The higher t
Debtors turnover
better collectability (i.e. 5 is better than 0.5).
The average number of days that the company took to collect the average amount of acc
Debtors turnover days (Day’s Sales in
the year. The shorter the turnover days indicates better collectability (i.e. 30 days is bette
Accounts Receivable)
is usually analysed with the credit terms extended to customers.
The number of times that the accounts payable get turned over per year. The lower the a
Creditors turnover
slow/delayed repayments.
The number of times that the inventories get turned over per year. The higher the amount
Inventory turnover
(i.e. 12 is better than 6).
Indicates the relationship between current assets (CA) to current liabilities (CL). The high
Current ratio
the better it is (i.e. ratio of 4:1 is better than 2:1).
Similar to current ratio, except that inventories, supplies and prepaid expenses are exclud
Quick ratio (Acid test ratio) relationship between the amount of assets that can be quickly converted into cash versus
liabilities. The higher the ratio, the more liquid the company is.
The proportion of the company’s assets supplied by the company’s creditors versus the a
Gearing ratio (Debt to equity) shareholders. Company with higher ratio (i.e. more than 50%) indicates a greater risk. A
indicates better financial stability.
The higher the margin, the more profitable the company. Margins will vary between indus
Gross profit margin
expected to fluctuate significantly from prior periods.
Indicates the profit per sales dollar. The higher the margin, the more profitable the compa
Net profit margin
between industries, however, it is not expected to fluctuate significantly from prior periods
Document explanation for significant movements/fluctuations that are unusual or not consistent with our understanding or expecta
financial position of the entity. Include references to our audit work and conclude if sufficient appropriate audit work had been perf
movements/fluctuations and that we are satisfied that our opinion remains appropriate.
t/m Analysis/Comments
(a)
(b)
(c)
(d)
(e)
(f)
(g)
Date: Date:
Guidance Template –
Indicators of suspicious
transactions
Money launderers use many different

and sophisticated types of schemes,
techniques and transactions to
accomplish their ends. While it would
be difficult to describe all money
laundering methodologies, the
following are the more frequently
observed signs of suspicions:
Yes No N/A Comments

1. Frequently observed signs of
suspicions:
a. Broadly, transactions that appear

inconsistent with a client's known
legitimate (business or personal)
activities or means; unusual deviations
from normal account and transaction;
b. Unauthorised or improperly

recorded transactions; inadequate
audit trails;
c. Unconventionally large currency

transactions, particularly in exchange
for negotiable instruments or for the
direct purchase of funds transfer
services;
d. Apparent structuring of

transactions to avoid dealing with
identification requirements or
regulatory record-keeping and
reporting thresholds;
e. Transactions passed through

intermediaries for no apparent
business reason; and
The following sets out examples of
common indicators of suspicious
transactions. Indicators to help
establish that a transaction is related to
terrorist financing mostly resemble
those relating to money laundering.
While each individual indicator may not
be sufficient to suggest that suspicious
transaction is taking place, a
combination of such situations may be
indicative of a suspicious transaction.
The list is intended as a guide and
shall not be applied as a routine
checklist in place of common sense.
Yes No N/A Comments

2. Common indicators of suspicious
transactions.
a. General
· Frequent address changes.
· Client does not want

correspondence sent to home address.
· Client repeatedly uses an address

but frequently changes the names
involved.
· Client uses a post office box or
general delivery address, or other type
of mail drop address, instead of a
street address when this is not the
norm for that area.
· Client’s home or business telephone

number has been disconnected or
there is no such number when an
attempt is made to contact client
shortly after he/she has opened an
account.
· Client is accompanied and watched.
· Client shows uncommon curiosity

about internal systems, controls,
policies and reporting; client has
unusual knowledge of the law in
relation to suspicious transaction
reporting.
· Client has only vague knowledge of

the amount of a deposit.
· Client gives unrealistic, confusing or

inconsistent explanation for transaction
or account activity.
· Defensive stance to questioning or

over-justification of the transaction.
· Client is secretive and reluctant to
meet in person.
· Unusual nervousness of the person
conducting the transaction.
· Client is involved in transactions that
are suspicious but seems blind to
being involved in money laundering
activities.
· Client insists on a transaction being
done quickly.
· Client appears to have recently
established a series of new
relationships with different financial
entities.
· Client attempts to develop close
rapport with staff.
· Client offers money, gratuities or
unusual favors for the provision of
services that may appear unusual or
suspicious.
· Client attempts to convince
employee not to complete any
documentation required for the
transaction.
· Large contracts or transactions with
apparently unrelated third parties,
particularly from abroad.
· Large lump-sum payments to or from

abroad, particularly with countries
known or suspected to facilitate money
laundering activities.
· Client is quick to volunteer that funds

are “clean” or “not being laundered”.
· Client’s lack of business knowledge

atypical of trade practitioners.
· Forming companies or trusts with no

apparent business purpose.
· Unusual transference of negotiable

instruments.
· Uncharacteristically premature
redemption of investment vehicles,
particularly with requests to remit
proceeds to apparently unrelated third
parties or with little regard to tax or
other cancellation charges.
· Large or unusual currency

settlements for investments or payment
for investments made from an account
that is not the client’s.
· Clients seeking investment
management services where the
source of funds is difficult to pinpoint or
appears inconsistent with the client’s
means or expected behavior.
· Purchase of large cash value

investments, soon followed by heavy
borrowing against them.
· Buying or selling investments for no
apparent reason, or in circumstances
that appear unusual, e.g. losing money
without the principals seeming
concerned.
· Forming overseas subsidiaries or

branches that do not seem necessary
to the business and manipulating
transfer prices with them.
· Extensive and unnecessary foreign

travel.
· Purchasing at prices significantly

below or above market.
· Excessive or unusual sales

commissions or agents fees; large
payments for unspecified services or
loans to consultants, related parties,
employees or government employees.
b. Cash Transactions

· Client frequently exchanges small
bills for large ones.
· Deposit of bank notes with a suspect

appearance (very old notes, notes
covered in powder, etc).
· Use of unusually large amounts in

traveler’s checks.
· Frequent domestic and international
ATM activity.
· Client asks to hold or transmit large
sums of money or other assets when
this type of activity is unusual for the
client.
· Purchase or sale of gold, diamonds
or other precious metals or stones in
cash.
· Shared address for individuals

involved in cash transactions,
particularly when the address is also
for a business location, or does not
seem to correspond to the stated
occupation (for example, student,
unemployed, self-employed, etc.).
c. Transactions Involving Accounts
· Apparent use of personal account for

business purposes.
· Opening accounts when the client’s
address is outside the local service
area.
· Opening accounts with names very
similar to other established business
entities.
· Opening an account that is credited
exclusively with cash deposits in
foreign currencies.
· Use of nominees who act as holders
of, or who hold power of attorney over,
bank accounts.
· Account with a large number of small
cash deposits and a small number of
large cash withdrawals.
· Funds being deposited into several

accounts, consolidated into one and
transferred outside the country.
· Use of wire transfers and the

Internet to move funds to/from high-risk
countries and geographic locations.
· Accounts receiving frequent deposits

of bearer instruments (e.g. bearer
cheques, money orders, bearer bonds)
followed by wire transactions.
· Deposit at a variety of locations and

times for no logical reason.
· Multiple transactions are carried out
on the same day at the same branch
but with an apparent attempt to use
different tellers.
· Establishment of multiple accounts,

some of which appear to remain
dormant for extended periods.
· Account that was reactivated from

inactive or dormant status suddenly
sees significant activity.
· Cash advances from credit card

accounts to purchase cashier’s checks
or to wire funds to foreign destinations.
· Large cash payments on small or

zero-balance credit card accounts
followed by “credit balance refund
checks” sent to account holders.
· Attempting to open accounts for the
sole purpose of obtaining online
banking capabilities.
d. Transactions Related to Offshore
Business Activity
· Loans secured by obligations from
offshore banks.
· Loans to or from offshore
companies.
· Offers of multimillion-dollar deposits

from a confidential source to be sent
from an offshore bank or somehow
guaranteed by an offshore bank.
· Transactions involving an offshore

“shell” bank whose name may be very
similar to the name of a major
legitimate institution
e. Accountants
· Client receives unusual payments
from unlikely sources which is
inconsistent with sales.
· Use of many different firms of

auditors and advisers for connected
companies and businesses.
· Client has a history of changing

bookkeepers or accountants yearly.
· Client is uncertain about location of

company records.
· Company records consistently reflect

sales at less than cost, thus putting the
company into a loss position, but the
company continues without reasonable
explanation of the continued loss.
· Company shareholder loans are not

consistent with business activity.
· Company makes large payments to

subsidiaries or other entities within the
group that do not appear within normal
course of business.
· Company is invoiced by

organizations located in a country that
does not have adequate money
laundering laws and is known as a
highly secretive banking and corporate
tax haven.
f. Tax Practitioners

· Client appears to be living beyond
his or her means.
· Client has no or low income
compared to normal cost of living.
· Client has unusual rise in net worth
arising from gambling and lottery gains.
· Client has unusual rise in net worth

arising from inheritance from a criminal
family member.
· Client owns assets located abroad,

not declared in the tax return.
· Client obtains loan from unidentified

parties
· Client obtains mortgage on a
relatively low income
g. Factors arising from action by the
entity or its directors
· Complex corporate structure where
complexity does not seem to be
warranted.
· Complex or unusual transactions,

possibly with related parties.
· Transactions with little commercial

logic taking place in the normal course
of business.
· Transactions not in the normal
course of business.
· Transactions where there is a lack of

information or explanations, or where
explanations are unsatisfactory.
· Transactions at an undervalue.
· Transactions with companies whose

identity is difficult to establish as they
are registered in countries known for
their commercial secrecy.
· Extensive or unusual related party

transactions.
· Many large cash transactions when
not expected.
· Payments for unspecified services,
or payments for services that appear
excessive in relation to the services
provided.
· The forming of companies or trusts
with no apparent commercial or other
purpose.
· Long delays in the production of
company or trust accounts.
· Foreign travel which is apparently

unnecessary and extensive.
Ref:
A4.1GT
% change from PY2 PY2 (Audited) t/m

ed on disaggregated, rather than aggregated, information. The

ormation per the notes to the financial statements disclosures
the financial information.

ans
ed over per year. The higher the amount indicates
ct the average amount of accounts receivable during

ectability (i.e. 30 days is better than 90 days). This
mers.
ver per year. The lower the amount indicates
r year. The higher the amount indicates faster sales
rrent liabilities (CL). The higher the ratio of CA:CL,
d prepaid expenses are excluded. Indicates the

kly converted into cash versus the amount of current
is.
mpany’s creditors versus the amount supplied by the

%) indicates a greater risk. A low-geared company
argins will vary between industries, however, it is not
he more profitable the company. Margins will vary

significantly from prior periods.
our understanding or expectation of the results and

riate audit work had been performed to verify those
WP ref
WP ref
Client: Ref:
Year end: A5
SCHEDULE OF UNCORRECTED MISSTATEMENTS

Final materiality (C3) Considered clearly trivial if below (C3) :
Judgemental/Projected Balance sheet

misstatements Actual misstatements DR/(CR)
DR (CR) DR (CR) Profit and loss Assets Liabilities Equity
DR/(CR) Current Non-Current Current Non-
Narrative Current
Effect of misstatements carried
forward from prior year(s) (B7)
- - - - - - - - - -
Total of potential misstatements(A)
Less: Effects of tax
- - - - -
[tax rate x (A)]
Total potential adjustments
-
(after tax) (B)
Profit before tax -
Financial statement balances (C) Profit after tax -
*Effect of potential adjustments (%) (B)/(C)
Note *:
To consider each individual misstatement and evaluate its effect on the relevant classes of transactions, account balances or disclosures, and the financial statements as a
whole. The cumulative effect of immaterial uncorrected misstatements related to prior periods also needs to be considered. Refer to SSA 450 for guidance.
B. UNCORRECTED DISCLOSURE MISSTATEMENTS

The following are uncorrected financial statements disclosures misstatements:
(To consider effect of prior year’s uncorrected misstatements (B7).
C. Evaluation of misstatements
1. Management has been asked to correct for all misstatements noted in A and B above (A3).
2. Where the management has not corrected misstatements drawn to their attention, the written letter of representation should be obtained to
explain the directors' reasons for not correcting as required by SSA 450.14 (A3).
3. None of the potential misstatements listed above are considered to be indicative of fraud.
4. None of the potential misstatements listed above, individually or in total, indicate that the overall strategy and audit plan need to be revised.
(To include qualitative factors considered in arriving at conclusion, if any)
D. Conclusion
The effect of uncorrected misstatements on the audit report is: (select Material and
Not material Material
one) pervasive
Date: Date:
Client: Ref:
Year end: A6 (2016)
JUSTIFICATION OF AUDIT OPINION (EFFECTIVE ON OR AFTER 15 DEC 2016)
A. Date of auditor’s report:
Audit opinion for financial Unmodified Qualified Disclaimer of

B. Adverse opinion
statements: opinion opinion opinion
C. Basis for modified opinion:

Basis for modified opinion on financial statements.
Appropriate but a
Appropriate but a
material
material uncertainty
D. Going concern assumption: Appropriate Inappropriate uncertainty exists
exists without
with adequate
adequate disclosure
disclosure
Description of going concern paragraph.
E. Emphasis of matter paragraph required? Yes No

Description of emphasis of matter paragraph.
F. Key Audit Matters paragraph required? Yes No

Description of each key audit matter.
G. Other Matters paragraph required? Yes No

Description of other matter paragraph
H. Audit opinion on other legal and Unmodified Qualified Disclaimer of
Adverse opinion
regulatory requirements opinion opinion opinion
I. Basis for modified opinion:

Basis for modified opinion on other legal and regulatory requirements (if different from C above)
Date: Date:
Client: Ref:
Year end: A6
JUSTIFICATION OF AUDIT OPINION (BEFORE 15 DEC 2016)
A. Date of auditor’s report:
Audit opinion for financial Unmodified Qualified Disclaimer of

B. Adverse opinion
statements: opinion opinion opinion
C. Basis for modified opinion:

Basis for modified opinion on financial statements.
D. Emphasis of matter paragraph/ other matter paragraph Yes No

required?
Description of emphasis of matter paragraph/other matter paragraph.
Audit opinion on other legal and Unmodified Qualified Disclaimer of

E. Adverse opinion
regulatory requirements: opinion opinion opinion
F. Basis for modified opinion:

Basis for modified opinion on other legal and regulatory requirements (if different from C above)
Date: Date:
Client: Ref:
Year end: A7
NOTES OF CLOSING MEETING WITH MANAGEMENT / THOSE CHARGED WITH

GOVERNANCE
Date and time of meeting:

Location:
Attendees at meeting:
Name Designation
Partner
A. Suggested agenda topics for discussion with management / those charged with governance
(including, but may not be limited to)
Agenda Minutes of meeting
1. For purpose of subsequent events update and planning

for next year, obtain updates on operations, industry, financial
condition management, finance team, regulatory compliance,
accounting policies used, going concern etc.
(e.g. Use the information in C4, C5, C6 series to guide the
discussion)
2. Presentation of audit findings

• Matters communicated to management;
• Further information required to complete the audit (A4).
3. Discuss with those charged with governance:

• Significant qualitative aspects of the entity’s accounting
practices, including accounting policies, accounting estimates
and financial statement disclosures. When applicable, the
auditor shall explain to those charged with governance why
the auditor considers a significant accounting practice, that is
acceptable under the applicable financial reporting framework,
not to be most appropriate to the particular circumstances of
the entity;
• Significant difficulty encountered during the audit, if any;
• Specific written representations;
• Matters that are significant to the oversight of the financial
reporting process;
• Uncorrected misstatements (A5);
• Auditor’s independence; and
• Significant deficiencies in internal control identified during
the audit (A8).
4. Other matters

Date: Date:
Client: Ref:
Year end: A8
LETTER OF COMMENTS TO MANAGEMENT / THOSE CHARGED WITH

GOVERNANCE – SAMPLE LETTER
(To Prepare Using Audit Firm Letterhead)
(Date)
(To the Board of Directors)
Dear Sir
In accordance with our normal practices and further to our meeting on [insert date], we are writing to draw your attention
to the various matters which arose during the course of the audit of the company's financial statements for the year
ended [insert date].
Comments on significant qualitative aspects of the entity's accounting practices and financial reporting, including
accounting policies, accounting estimates and financial statement disclosures.
[Where applicable]
Explanation of why significant accounting practices acceptable under the applicable financial reporting framework
are not the most appropriate for the entity's circumstances.
Significant difficulties, if any, encountered during the audit.
Significant findings from the audit. [This must include where applicable]
(a) A description of deficiencies and an explanation of their potential effects

(b) Identified fraud or information that indicates that a fraud may exist.
(c) Any other matters related to fraud that are, in the auditor's judgement, relevant.
(d) Significant deficiencies in internal control that have or will be reported to those charged with governance.
(e) Other deficiencies in internal control of sufficient importance to be reported to management.
(f) Uncorrected misstatements for the current period together with a request that they be corrected.
(g) The effect of uncorrected misstatements related to prior periods.
[Where those charged with governance are not all involved in management, include where applicable.]
h) Fraud involving management or employees who have significant roles in internal control or others where the
fraud results in material misstatements in the financial statements.
(i) Matters involving non-compliance with laws and regulations other than when the matters are clearly
inconsequential.
(j) Any refusal by management to allow the sending of a confirmation request.
(k) Significant matters in connection with the entity's related parties.
(l) Events or conditions identified that may cast significant doubt on the entity's ability to continue as a going
concern including:
(i) Whether the events or conditions constitute a material uncertainty;
(ii) Whether the use of the going concern assumption is appropriate in the preparation and
presentation of the financial statements; and
(iii) The adequacy of related disclosures in the financial statements.
(m) Any management imposed limitation on the scope of the audit that is likely to result in a qualified opinion.
(n) Any material misstatement found in the prior period financial statements on which a predecessor auditor had
previously reported without modification.
(o) Material misstatements of fact or inconsistencies with other information issued with the financial statements
and any refusal by management to correct the position.
Significant matters, if any, arising from the audit that were discussed, or subject to correspondence with
management; including corrected misstatements. [include where those charged with governance are not all
involved in management]
Written representations requested by the auditor. [include where those charged with governance are not all
involved in management]
Other matters arising from the audit that are significant to the oversight of the financial reporting process.
The proposed wording for any expected modifications to the audit report and the circumstances that led to this report
being necessary.
[Any other relevant matters.]
We would like to take this opportunity to express our appreciation to your staff for their assistance during the
course of our audit.
Please note that this report has been prepared for the sole use of [Name of Company Limited]. It must not be
disclosed to third parties, quoted or referred to, without our prior written consent. No responsibility is assumed by
us to any other person.
The purpose of the audit was to enable us to express an opinion on the financial statements.
The audit included consideration of internal control relevant to the preparation of the financial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of internal control.
The matters reported above are limited to those deficiencies that the auditor has identified during the audit and
that the auditor has concluded are of sufficient importance to merit being reported to those charged with
governance.
If we can be of any further assistance, please contact [insert name].
Yours faithfully
FIDUCIA LLP
Client: Ref:
Year end: A9
POINTS CARRIED FORWARD TO NEXT YEAR’S AUDIT – PLACEHOLDER
Date: Date:
Client: Ref:
Year end: B
B AUDIT ACCEPTANCE AND ADMINISTRATION
* Please tick where applicable

1 Preliminary engagement activities
1.1 Customer Due Diligence (Recurring engagement)
1.2 Independence questionnaire (Recurring engagement)
1.3 Engagement letter
2.1 Assignment planning – Timetable
2.2 Time cost budget and performance summary
2.3 Letter for arrangement of audit – PLACEHOLDER
3 Job progress report
4 Calling over and typing instructions checklist
5 Current year management accounts – PLACEHOLDER
6 Prior year signed financial statements – PLACEHOLDER
Prior year A5 Schedule of uncorrected misstatements for
7
follow up in current year – PLACEHOLDER
Prior year A8 Letter of comments for follow up in current year
8
– PLACEHOLDER
Prior year A9 Points carried forward to next year’s audit for
9
follow up in current year – PLACEHOLDER
Client:
Year end:
Preliminary engagement activities

Comments WP Ref
A. Permanent audit file
1. Is this an initial engagement? If yes, please

obtain the necessary information and approval in PAF1.1 to
accordance with the firm’s Client and Engagement PAF1.2
Acceptance and Continuance policy.
B. Continuance procedures
1. For recurring higher-risk engagement risk

rating, update the customer due diligence (CDD)
Date updated: B1.1
documents, data or information collected in prior
period and keep up-to-date records
2. For low/normal risk engagement risk rating,

consider the need to update CDD documents, data
Date updated: B1.1
or information at appropriate times using the firm’s
risk-based approach.
3. Where there are changes to the information

previously obtained in the permanent audit file,
perform the necessary procedures and obtain the
B1.1
necessary approval in accordance with the firm’s
Client and Engagement Acceptance and
Continuance policy.
4. Update the independence questionnaire or

otherwise document any threats to independence,
B1.2
the safeguards applied and the conclusion as to
whether the firm may act/continue as auditors.
5. Are there any circumstances or events that may

cast significant doubt on the integrity of the client's
owners, board of directors or management?
Consider the following:

(a) Convictions and regulatory sanctions;
(b) Suspicion of illegal acts or fraud;
(c) Ongoing investigations;
(d) Negative publicity;
(e) Close association with people/companies with

questionable conduct; and
(f) Deliberately withheld or intentionally misled

client information.
6. Consider any other factors such as staff
resources or conflict of interests with existing clients
prior to engagement continuance.
C. Scope of engagement
1. Confirm that there is a signed engagement
letter addressing issues such as the reporting Date: B1.3
framework and the responsibilities of management.
2. If this is an existing client, consider whether

there is a need to revise the existing terms and
issue a new engagement letter when there is:
(a) An indication that the entity misunderstands the

objective and scope of the audit;
(b) A revised or special terms of the audit

engagement;
(c) A recent change of senior management;
(d) A significant change in ownership;
(e) A significant change in nature or size of the
entity's business;
(f) A change in legal or regulatory requirements;
(g) A change in the financial reporting framework

adopted in the preparation of the financial
statements; and
(h) A change in other reporting requirements.
3. Confirm that, where applicable, the engagement
terms reflect the engagement reporting
requirements.
D. Those charged with governance
1. Specify the appropriate persons within the
governance structure for communication purposes,
other than the board of directors.
2. Where non-audit services are performed,
specify the persons informed for the respective
services.
Prepared by:
Date:
Ref:
B1
Reviewed by:
Date:
Client:
Year end:
Customer due Diligence (RECURRING engagement)

A. Customer due diligence (CDD) engagement risk rating for the client in prior year (PAF1.1 or B1.1):
Year of last update of CDD
Engagement risk rating
records
Low
Normal
High
B. Update of CDD records
1. Obtained updated CDD records (i.e. PAF1.1-PAF1.1EE) in current

year?
- Perform risk assessment

Yes in B1.1 Annex 1 and WP ref
proceed to D.
Proposed year of update

No - Proceed to C.
of CDD records:
Yes/No Comments
C. Changes in client information
1. Are any changes or updates to the

lists and information provided by the
MAS or other relevant authorities in
Singapore? If yes, perform screening
against the revised list(s) as follows:
Does the client, beneficial owner of the

client, person acting on behalf of the
client, or connected party of the client
(PAF1.1A-D) matches the details in the
following revised lists:
(a) The “Lists of Designated Individuals

and Entities” on the MAS website;
(b) The “Terrorist Alert List” on the

ISCA website; or
(c) Any other similar lists and
information required of professional
firms for screening purposes stipulated
by relevant authorities in Singapore
including the Accounting and Corporate
Regulatory Authority; and
and the exceptions cannot be disposed

of satisfactorily?
2. Are any changes or updates to the

natural persons appointed to act on
behalf of a client, connected party of a
client or beneficial owners of a client? If
yes, complete B1.1 Annex 1.
3. Is a change of control and/or

ownership of the client or when there is
a material change in the level, type or
conduct of business? If yes, complete
B1.1 Annex 1.
4. Are there reasonable grounds for

suspicion that existing business
relations with a client are connected
with money laundering or terrorist
financing? If yes, reconsider
engagement risk rating and re-
appointment of engagement.
5. We have considered the integrity of

the client (i.e. principal owners, key
management and those charged with
governance), and obtained information
that would lead us to conclude or have
reasons to believe that the client lacks
integrity? If yes, reconsider engagement
risk rating and re-appointment of
engagement.
Where the response to C.2 and C.3 above is “Yes”, perform risk assessment in B1.1 Annex 1.
D. CDD Risk Evaluation and Approval

1. Any change in engagement risk
rating after performing the above
review?
No
(i) Specify revised
Yes Low
engagement risk rating:
(ii) Obtain MLRO approval and approval of senior management.
2. Recommendation for the business

relationship:
Additional approvals may be
Maintain needed for High engagement
risk ratings.
“Terminate” action should be
discussed with the MLRO to
Terminate
decide appropriate further
action
Audit engagement partner: Second partner (where appropriate*):
Date: Date:
* Required for high-risk engagements.
Annex 1: Examples of factors to consider in AML/CFT risk assessment

Extracted from ISCA EP 200 IG 2 revised June 2017 - Annex 2: Examples of factors to
consider in AML/CFT risk assessment
The following sets out examples of factors that professional accountants and professional firms
should consider when performing risk assessment. These are examples of factors and are not
exhaustive.
SECTION A
If the response to any of the statements in Section A is “Yes”, the professional firm shall NOT establish business rel
the client.
The client is unable to provide all the required information in the relevant forms.
The required information obtained cannot be verified to independent and reliable

documents.
The client, beneficial owner of the client, person acting on behalf of the client, or
connected party of the client matches the details in the following lists:
(d) The “Lists of Designated Individuals and Entities” on the MAS website;
(e) The “Terrorist Alert List” on the ISCA website; or
(f) Any other similar lists and information required of professional firms for screening
purposes stipulated by relevant authorities in Singapore including the Accounting and
Corporate Regulatory Authority; and
and the exceptions cannot be disposed of satisfactorily.
There is suspicion of money laundering and/or terrorist financing.
“Yes” to any of the questions in Sections B, C and D serves as indicators of higher risk factors. Where there
more “yes” responses, professional judgement must be exercised, with reference to the policies and proced
professional firm, as to the nature and extent of customer due diligence to be carried out. Risk factors shoul
discussed with the designated personnel as per the policies and procedures of the professional firm, such a
Laundering Reporting Officer (MLRO).
SECTION B: CLIENT’S RISK FACTORS

Question
Is the client, any of the beneficial owner of the client or person acting on behalf of the
client a Politically Exposed Person (PEP), family member of a PEP or close associate
of a PEP?
The professional firm has performed further screening of details of client, beneficial
owner of the client, person acting on behalf of the client, or connected party of the
client against other information sources, for example, Google, the sanctions lists
published by the Office of Foreign Assets Control of the US Department of the
Treasury, and/or other third party screening database.
Are there adverse news or information arising?
Is the client in a high-risk industry[1]?

Does the client have nominee shareholder(s) in the ownership chain where there is no
legitimate rationale?
Where applicable, do the nominee shareholders represent majority ownership?
Is the client a shell company?

Does the client have unusual or complex shareholding structure (e.g. involving 3 layers
or more of ownership structure, different jurisdictions, trusts), given the nature of its
business?
Is the client a charitable or non-profit organisation that is NOT registered in Singapore
(charities.gov.sg/charity/index.do)?
Is the client’s business cash-intensive?

Does the client frequently make unaccounted cash transactions to similar recipients?
Are the client’s company accounts updated?

Does the client’s shareholders and/or directors frequently change, and the changes are
unaccounted for?
SECTION C: COUNTRY / TERRORITY RISK FACTORS

Question
Is the client, beneficial owner of the client or person acting on behalf of the client from
or based in a country or jurisdiction in relation to which the FATF has called for
countermeasures[2]?
The following would be applicable: nationality, country of incorporation / registration,

residential address, registered address, address of principal place of business.
Is the client, beneficial owner of the client or person acting on behalf of the client from
or based in a country or jurisdiction known to have inadequate AML/CFT measures[3]?
The following would be applicable: nationality, country of incorporation / registration,

residential address, registered address, address of principal place of business.
Does the client, beneficial owner or person acting on behalf of the client have dealings
in high risk jurisdictions[4]?
SECTION D: SERVICES / TRANSACTIONS RISK FACTORS

Question
Is the business relationship with the client established through online, postal or
telephone, where non face-to-face approach is used?
Has the client given any instruction to perform a transaction (which may include cash)
anonymously?
Has the client transferred any funds without the provision of underlying services or
transactions?
Are there unusual patterns of transactions that have no apparent economic purpose or
cash payments that are large in amount, in which disbursement would have been
normally made by other modes of payment (such as cheque, bank drafts etc.)?
Are there unaccounted payments received from unknown or un-associated third parties
for services and/or transactions provided by the client?
Is there instruction from the client to incorporate shell companies with nominee
shareholder(s) and/or director(s)?
Does the client set-up or purchase companies or business entities that have no
obvious commercial purpose?
This would include:
· Multi-layer, multi-country and complex group structures.
· Setting up entities in Singapore where there is no obvious commercial purpose, or
any other personal or economic connection to the client.
Is there any divergence in the type, volume or frequency of services and/or
transactions expected in the course of the business relationship with the client?
SECTION E: CLIENT RISK RATING
Low – Simplified CDD
Normal – Normal CDD
High – Enhanced CDD
Document reasons for client risk rating:
Assessed by:
Signature:
Name:
Position:
Date:
Approved by:
Signature:
Name:
Position:
Date:
[1] As determined by the firm, such as with reference to publications and guidance
issued from time to time by the FATF.
[2] Refer to the FATF website for list of jurisdictions which the FATF has called for countermeasures.
[3] This can be determined by the professional firm, those notified and required of the firm by relevant authorities,
[4] Refer to the FATF list of high-risk and non-cooperative jurisdictions to determine which countries are high-risk
jurisdictions: http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/
Ref:
B1.1
prior year (PAF1.1 or B1.1):
WP Ref
ment in B1.1 Annex 1.
Normal High
senior management.
tner (where appropriate*):
assessment
ts and professional firms

es of factors and are not
nal firm shall NOT establish business relationship with
Response
Yes No
Yes No
Yes No
Yes No
ors of higher risk factors. Where there is one or

h reference to the policies and procedures of the
e to be carried out. Risk factors should be
dures of the professional firm, such as the Money
FACTORS
Response
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
RISK FACTORS
Response
Yes No
Yes No
Yes No
NS RISK FACTORS
Response
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
Yes No
RATING
Client: Ref:
Year end: B1.2
INDEPENDENCE QUESTIONNAIRE (RECURRING ENGAGEMENT)
This questionnaire assumes knowledge of the ACRA Code of Professional Conduct and Ethics for Public
Accountants and Accounting Entities. In the case of a financial statements audit, where relevant, all questions should be
treated as applying to all partners and staff in the firm or a network firm and to close members of their family[1].
* Please tick where applicable YES NO

1. Beneficial interests and trusteeships
Do you or any of your staff have any financial involvement in the entity in respect of
the following:
(a) Beneficial interest in shares or other investments?
(b) Beneficial interest in trusts?
(c) Trustee investments or nominee shareholdings?
(d) Trusteeships in a trust that holds shares in an audit client?
2. Loans, guarantees and overdue fees
(a) Do you or any of your staff in the firm or a network firm have any loans
or guarantees to or from the client?
(b) Are there any overdue fees for any services due from the client?
3. Associated firms
Are you or your staff associated with any other practice or organisation which has
any dealings with the client?
4. Mutual business interest
Do you or any of your partners or staff have any mutual business interests with the
client or with an officer or employee of the client?
5. Family or other personal relationships
Do you or any of your staff have any personal or family connections with the client
and its officers?
6. Ex-partners or senior employees
(a) Has any officer of the entity been a partner or senior employee in the
practice?
(b) Is the partner or any senior employee on the audit joining or involved in
substantive negotiations with the client?
7. Rotation of senior assurance team personnel
Has there been any long association of senior personnel in the firm with the
assurance client?
Independent/ Manager in charge Senior in charge of

Year Audit partner
Second partner of the audit the audit
1.
2.
3.
[1] FRS 24 Related Party Disclosures paragraph 9
Client: Ref:
Year end: B1.1
* Please tick where applicable YES NO

8. Provision of other services, specialist valuations and advocacy by the firm or
a network firm
(a) Are any services in relation to the management of the entity performed
by the firm or a network firm?
(b) Are any accounting services performed for the entity such as
preparation of the financial statements from trial balance, bookkeeping
or payroll services?
(c) Do the accounts include any specialist valuations carried out by the firm
or a network firm?
(d) Are the firm or a network firm currently acting for the client as an
advocate in any adversarial proceeding or situation such as a hearing
before the tax authorities?
(e) Has the firm or a network firm been involved in the design, provision or
implementation of any IT systems?
(f) Does the firm or a network firm provide advice on taxation matters or
undertake tax compliance work for the client?
(g) Have any other services been provided to the client that may cause a
threat to the firm’s objectivity or independence?
9. Undue fee dependence on an audit client
(a) Do the total fees for this client/group of clients exceed ‘x’% of firm's total
fees?
(b) Are there any fees charged to this client/group of clients on a contingent
basis?
10. Gifts and hospitality
Have you or any of your staff accepted any material goods or services on
favourable terms or received undue hospitality from the client?
11. Litigation
Is there any actual or threatened litigation between yourself and the client in relation
to fees, audit work, or other work?
SAFEGUARDS
Where any of the above questions have been answered 'yes', specify what safeguards are proposed to maintain
integrity and independence, and to ensure the availability of resources and the ability to perform the audit in
accordance with the applicable SSAs.
Client: Ref:
Year end: B1.1
CONCLUSION
In relation to any safeguards identified above, I am satisfied that appropriate procedures regarding the acceptance
and continuance of this client relationship and audit engagement have been followed, and that the conclusion
reached in this regard is appropriate and has been properly documented. In arriving at this conclusion I confirm that I
have:
(a) obtained all relevant information to identify and evaluate circumstances and relationships that may create a
threat to independence;
(b) evaluated information on identified breaches, if any, of the firm's independence policies and procedures to
determine whether they create a threat to independence for this audit engagement;
(c) taken appropriate action to eliminate such threats or reduce them to an acceptable level by applying
safeguards; and
(d) documented the conclusion on independence and any relevant discussions within the firm that support this
view.
Staff Grade Personnel Name Initial

Assignment start
date
Engagement partner
Engagement manager
Engagement senior
Engagement assistant
CONSULTATION (to be completed where applicable)
In my opinion the steps proposed are sufficient to maintain independence and to ensure the availability of resources
and the ability (see B2 for assessment) to perform the audit in accordance with the applicable SSAs.
Second partner:
Date:
Client: Ref:
B1.2GT
Year end:
ACCOUNTING AND TAX COMPLIANCE: APPLICATION OF SAFEGUARDS
A. NATURE OF THREAT
*Tick where Risk
Services provided by auditor in addition to assurance applicable of threat
Yes No High/Medium/Low
1. Preparation of statutory accounts from management accounts
where little or no adjustment is required and the management
approves any adjustments and narrative in the financial
statements.
2. Preparation of statutory accounts from trial balance or
management accounts where significant adjustments are
required but management approves those adjustments and
narrative in the financial statements.
3. Preparation of statutory accounts from management accounts
where significant adjustments are required but management
approves those adjustments and narrative in the financial
statements.
4. The firm maintains the payroll.
5. The firm completes payroll returns.
6. The firm maintains the accounting records and/or prepares
management accounts.
7. The firm prepares the tax computations that are routine with little
or no judgement required.
8. The firm prepares the tax computations where there are
contentious items whose treatment may be disputed by the tax
authorities.
B. RESPONSES TO THREAT
*Please tick where
applicable
1. If the threats arising are insignificant, no other action is required other than confirming
that those charged with governance have been informed and approvals to any
adjustments or narrative notes have been obtained by management and those
charged with governance.
2. The file contains evidence that the possible threats have been considered and the
treatment of relevant matters have been discussed and agreed in principle with those
charged with governance.
3. In addition to file notes, a different engagement team was responsible for the non-audit
work.
4. There will be a second partner review of at least the financial statements, planning,
completion and any contentious areas where judgement was required by the auditor.
I approve the safeguards applied in relation to the threats identified and confirm that in my opinion they are sufficient
to safeguard the firm's independence.
Audit engagement partner: Second partner (where applicable):

Date: Date:
Client: Ref:
Year end: B1.3
Engagement letter
(PA Firm Letterhead)
Date:
PAW COMPANY PTE LTD

49 Bali Lane
Singapore 394749
Attention: Mr Ang Bee See
Dear Sir
The objective and scope of the audit
You have requested that we audit the financial statements of PAW Company Pte Ltd, which comprise
the statement of financial position as at 31 December 20X1, and the statement of comprehensive
income, statement of changes in equity and statement of cash flows for the year then ended, and notes
to the financial statements, including a summary of significant accounting policies. We are pleased to
confirm our acceptance and our understanding of this audit engagement by means of this letter.
The objectives of our audit are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Singapore Standards on Auditing (SSAs) will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
The responsibilities of the auditor
We will conduct our audit in accordance with SSAs. Those standards require that we comply with ethical
requirements. As part of an audit in accordance with SSAs, we exercise professional judgement and
maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control.3 However, we will communicate to you in writing concerning
any significant deficiencies in internal control relevant to the audit of the financial statements that we
have identified during the audit.
· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
· Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
Because of the inherent limitations of an audit, together with the inherent limitations of internal control,
there is an unavoidable risk that some material misstatements may not be detected, even though the
audit is properly planned and performed in accordance with SSAs.
The responsibilities of management and identification of the applicable financial reporting framework
Our audit will be conducted on the basis that management and those charged with governance
acknowledge and understand that they have responsibility:
(a) For the preparation of financial statements that give a true and fair view in accordance with the
provisions of the Companies Act, Chapter 50 (the Act) and Financial Reporting Standards in Singapore;
(b) For devising and maintaining a system of internal accounting controls sufficient to provide a
reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition;
and transactions are properly authorised and that they are recorded as necessary to permit the
preparation of true and fair financial statements and to maintain accountability of assets;
(c) To provide us with:
(i) Access

to all information of which [management] is aware that is relevant to the preparation of
the financial statements such as records, documentation and other matters;
(ii) Additional information that we may request from [management] for the purpose of the audit;
and
(iii) Unrestricted access to persons within the entity from whom we determine it necessary to obtain
audit evidence.
As part of our audit process, we will request from management and those charged with governance,
written confirmation concerning representations made to us in connection with the audit.
Other relevant information
Our fees, which will be billed as work progresses, are based on the time required by the individuals
assigned to the engagement plus expenses. We estimate that our total fees for this audit will be
$XXX,XXX, plus expenses. Invoices will be sent and payments are due [upon presentation/30 days
from the date of the invoice].
We will notify you promptly of any circumstances we encounter that could significantly affect our
estimate and discuss with you any additional fees, as necessary. Additional services provided beyond
the described scope of services will be billed separately.
Reporting
[Insert appropriate reference to the expected form and content of the auditor’s report including, if
applicable, the reporting on other information in accordance with SSA 720 (Revised).] The form and
content of our report may need to be amended in the light of our audit findings.
Please sign and return the attached copy of this letter to indicate your acknowledgement of, and
agreement with, the arrangements for our audit of the financial statements including our respective
responsibilities.
Yours faithfully
PA & CO LLP
Acknowledged and agreed on behalf of

PAW COMPANY PTE LTD by
................................................
Name: Mr Ang Bee See
Title: Director
Date:
Client:
Year end:
Audit PLANNING administration

Comments
A. Office Procedures
1. Have the necessary files been set up?
2. Have the client’s details been entered onto
the firm engagement file management system for
new clients or new engagement?
B. Engagement admin/performance of
audit
1. Has the client signed or agreed to sign the
necessary authorisations?
(a) Tax authority
(b) Bank authority
(c) Other (specify)
C. Planning Procedures
1. Meet/discuss with client on current year's
accounts and timetable.
2. Obtain print-out of the firm's WIP and prepare

fee budget. Agree fee estimate with client.
3. Consider whether any experts to be used

have the appropriate competence and capability.
Prepared by:
Date:
Ref:
B2GT
WP Ref
B2.1
B2.2
B3
Reviewed by:
Date:
Client: Ref:
Year end: B2.1
ASSIGNMENT PLANNING - TIMETABLE
In assigning staff consider the competence and capabilities required of the engagement team as a whole including:
(a) understanding of, and practical experience with, audit engagements of a similar nature and complexity
through appropriate training and participation;
(b) understanding of professional standards and applicable legal and regulatory requirements;
(c) technical expertise , including expertise with relevant information technology and specialised areas of
accounting or auditing;
(d) knowledge of relevant industries in which the client operates;
(e) ability to apply professional judgement;
(f) understanding of the firm's quality control policies and procedures; and
(g) the assessment of the risk of material misstatement due to fraud.
Planned dates Actual dates

1. Availability of accounting records
2. Staff bookings:
(a) to to
(b) to to
(c) to to
(d) to to
(e) to to
Attendance at inventory count:
(f) to to
(g) to to
3. Revised letter of engagement sent
4. Information requests
(a) Bank confirmations
(b) Solicitor’s letter
(c) Trade receivables confirmations
(d) Trade payables confirmations
(e) Paid cheques
(f)
(g)
5. Manager’s review
6. Partner’s review
7. Discussion of financial statements with
management
8. Availability of final signed financial statements
9. Other details
(a)
(b)
Based on the above staff and engagement work assignment, comment if we are satisfied that the engagement
team, and any auditor’s experts who are not part of the engagement team, collectively have the appropriate
competence and capabilities to perform the audit engagement in accordance with professional standards and
applicable legal and regulatory requirements:
Initial (Planning)
Date: Date:
Final update
Date: Date:
Client: Ref:
Year end: B2.2
TIME COST BUDGET AND PERFORMANCE SUMMARY
1. STAFF
Budget (units) Actual (units)
Staff initials or grade Total Total
A. Audit Completion
B. Audit Acceptance and
Administration
C. Audit Planning
D. General Audit Procedures
E. Cash and Bank Balances
F. Trade, Bills and Other
Receivables
G. Inventories
H.
I. Property, Plant and Equipment
J. Investment Property
K. Equity Investments
L.
M.
N. Trade and Other Payables
O. Borrowings and Finance Lease
P. Current and Deferred Income

Taxes
Q.
R. Share Capital and Reserves
S. Profit or Loss – Revenue and
Cost of Sales
T. Profit or Loss – Operating
Expenses and Others
U. Related Party Transactions
and Disclosures
V. Subsequent Events and Going
Concern
W.
X. Provisions, Contingent
Liabilities and Financial
Commitments
Y.
Z.
Total units
Charge out rate
Cost of units
2. PARTNER
Name/Initial Budget (Units) Cost of units Actual (Units) Cost of units
3. SUMMARY ANALYSIS
Cost of Actual Cost of Over/Under
Budget (Units) Difference ($)
units ($) (Units) units ($) recovery
Staff
Partner
Total
Client: Ref:
Year end: B2.2
Explanation where actual difference is greater than “x”% of budget and follow up action.
Initial (Planning)
Date: Date:
Final update
Date: Date:
Client: Ref:
Year end: B2.3
LETTER FOR ARRANGEMENT OF AUDIT - PLACEHOLDER

Client: Ref:
Year end: B3
JOB PROGRESS REPORT
Staff name: Grade:
This document should be used to maintain an accurate analysis of the time charged to each client. The time
charged to date, together with the ‘estimate to completion’, should provide the best estimate of the total to be
incurred. Any significant deviation from budget should be explained in the comments column.
Dates Estimate
Budget b/fwd c/fwd to TOTAL Comments
complete
Completion
Planning
Optional programmes
Intangible assets
Property, plant and equipment
Investments in group and

associated undertakings
Other investments
Inventories
Trade and other receivables
Cash and bank balances
Trade and other payables
Long-term loans & deferred
income
Provisions and contingencies
Capital
Income taxes
Income statement
Subsequent events
General ledger
Consolidation
Audited working papers
Letter of comment/meetings
Typing/production of financial
statements
Others*
TOTAL
* Analyse in more detail if required

Client: Ref:
Year end: B4
CALLING OVER AND TYPING INSTRUCTIONS CHECKLIST
Calling over
(Insert initials & date)
Draft financial statements — prior to client approval
Called by: Casted by:
Read by: Referenced to file by:
Final financial statements for approval – by engagement partner

Approved by:
Date:
Typing/printing instructions
Copies required Number of copies Notes
Statutory accounts
Other accounts
Client
Tax
Audit File
Other
Client: Ref:
Year end: B5
CURRENT YEAR MANAGEMENT ACCOUNTS - PLACEHOLDER
The auditor’s documentation shall demonstrate that the financial statements agree or reconcile with the
underlying accounting records. The auditor should obtain a copy of current year management accounts (trial
balance and management reports) as the source to address the above requirement.
The procedures to test the closing general ledger are found in D4.
Client: Ref:
Year end: B6
PRIOR YEAR SIGNED FINANCIAL STATEMENTS - PLACEHOLDER
We encourage auditors to document the test of opening balance on the prior year financial statements
instead of documenting the work on a separate audit working paper (AWP). Documenting our work on the
prior year financial statements would ensure accuracy and minimises transposition error.
Sample documentation:
Objective: To obtain reasonable assurance that the opening balances in the general ledger as of [beginning
of the current period] is correctly brought forward from the closing balances as of [end of the prior period].
A: Agreed balance to general ledger balances as of [beginning of the current period].
Conclusion: Based on work performed, we are satisfied/not satisfied that the opening balances in the
general ledger as of the [beginning of the current period] is correctly brought forward from the closing
balance as of [end of the prior period].
Client: Ref:
Year end: B7
PRIOR YEAR A5 SCHEDULE OF UNCORRECTED MISSTATEMENTS FOR

FOLLOW UP IN CURRENT YEAR - PLACEHOLDER
Client: Ref:
Year end: B8
PRIOR YEAR A8 LETTER OF COMMENTS FOR FOLLOW UP IN CURRENT

YEAR - PLACEHOLDER
Client: Ref:
Year end: B9
PRIOR YEAR A9 POINTS CARRIED FORWARD TO NEXT YEAR'S AUDIT FOR

FOLLOW UP IN CURRENT YEAR - PLACEHOLDER
Client: Ref:
Year end: C
C AUDIT PLANNING

1 Planning memorandum
2 Audit strategy
2.1 Quality review
3 Determining overall materiality
4 Understanding the entity and its environment
5 Internal controls
5.1 Understanding the design of internal controls
5.2 Review of implementation of internal controls
6 Preliminary analytical procedure and evaluation of going
concern risk
7 Notes of meeting – Summary control list
7.1 Notes of planning meeting with management / those charged
with governance
7.2 Notes of planning meeting with engagement team
8 Risk assessment summary
8.1 Financial statements level risk assessment
8.2 Specific assertion level risk assessment
9 Risk response summary
9.1
Test of operating effectiveness of relevant internal controls
Client: Ref:
Year end: C1
PLANNING MEMORANDUM
1. APPROVAL OF PLANNING
I confirm that:
1. The preconditions for an audit are present and the scope of the audit engagement has been agreed with
management and those charged with governance.
2. An audit strategy has been established for the audit.
3. An audit plan, which includes the following, has been developed to reduce risk to an acceptable level:
- Assessment of the risks of material misstatement in the financial statements due to fraud;
- Design of audit procedures to obtain sufficient appropriate audit evidence in accordance with the
requirements in the SSAs, relevant ethics code, laws and regulations, the terms of the audit
engagement and financial reporting requirements; and
- Customised audit programmes to address the financial statement and assertion level risks in
accordance with the SSAs.
4. Professional scepticism has been exercised to establish the audit strategy and design the audit procedures,
taking into account the circumstances which may cause the financial statements to be materially misstated.
5. The engagement team collectively has the appropriate capabilities, competence and time to perform the audit
engagement in accordance with professional standards and regulatory and legal requirements. The
engagement team has been adequately briefed to perform the audit in order to issue an appropriate audit
opinion.
Audit engagement partner: Second partner (where appropriate):
Date: Date:
2. UPDATE AT COMPLETION STAGE
I confirm that:
1. The overall strategy and audit plan were updated as necessary during the course of the audit.
2. All issues arising from the audit plan have been addressed and documented.
3. The audit plan has been cross-referenced to where the relevant work was performed.
4. The assessment of materiality and risk have been reviewed and amended where necessary.
Audit engagement partner: Second partner (where appropriate):
Date: Date:
Client: Ref:
Year end: C1
3. CONFIRMATION BY AUDIT TEAM
I confirm that I have read and understood the audit plan (Section C):
Audit team designation Name Initials Date
Audit partner
Second partner
Manager
Senior
Assistant
Client: Ref:
Year end: C2
AUDIT STRATEGY
The overall audit strategy sets out the scope, timing and direction of the audit which will guide the development of
the audit plan. In establishing the overall audit strategy, the auditor shall:
a. Identify the characteristics of the engagement that defines the scope.

WP
Audit considerations Yes No N/A
Ref
1. Other than the Singapore FRSs, does the client prepare the financial
information to be audited using another financial reporting framework?

2. Is the engagement team required to audit/review any generally accepted
accounting principles (GAAP) differences to another financial reporting
framework?
3. Are there any industry-specific reporting requirements such as reports
mandated by industry regulators?
4. Is the engagement team required/expected to visit multiple locations
within Singapore for the audit?
5. Are there accounting records and/or significant assets that are located
outside Singapore?
6. Are we expected to rely on audit procedures performed by another
auditor?
7. Is the nature of the business segments to be audited considered a
specialised industry and/or is there a need for specialised subject matter
experts to perform this audit?
8. Is the presentation currency for the financial statements different from the
functional currency used for recording in the entity’s general ledger?

9. Does the entity have an internal audit function and/or the internal auditors
can be used to provide direct assistance, for purposes of the audit?

10. Is one or more of the entity’s financial reporting information/function
dependent on service organisations?
11. Do we expect to make use of audit evidence obtained in previous audits,
for example, audit evidence related to risk assessment procedures and
tests of controls in our current year audit?
12. Are we expected to use information technology in performing our audit
procedures, (e.g., obtaining electronic data from the management and the
expected use of computer-assisted audit techniques, etc.)?

13. Will the engagement team be performing a review of the entity’s interim
financial information and/or relying on information obtained during the
interim reviews to revise the final audit procedures?
14. Is the availability of the client personnel and data expected to be
limited/restricted?
Client: Ref:
Year end: C2
b. Ascertain objectives of the engagement to plan the nature, timing and extent of the audit, including
the types of the communications required.
WP
Ref
1. Are there multiple reporting obligations, such as at interim and final
stages?
2. Is the engagement team expected to have extensive, complicated, limited
or restricted meetings with management and those charged with
governance to discuss the nature, timing and extent of the audit work?
or restricted discussions with management and those charged with
governance regarding the expected type and timing of reports to be
issued and other communications, both written and verbal, including the
auditor's report, management letters and communications to those
charged with governance?
or restricted discussion with management regarding the expected
communications on the status of audit work throughout the engagement?

5. Is it difficult to communicate the expected nature and timing of
communications among engagement team members, including the nature
and timing of team meetings and timing of the review of work performed?
6. Are there other expected communications with third parties, including any
statutory or contractual reporting responsibilities arising from the audit?
c. Consider the factors that, in the auditor’s professional judgement, are significant in directing the
engagement team’s efforts. Consider the results of preliminary engagement activities and, where
applicable, whether knowledge gained on other engagements performed by the engagement
partner for the entity is relevant.
WP
Ref
1. Is the determination of materiality expected to be complex? (e.g. first year

client, change in user expectations, etc.)
2. Is there any preliminary identification of areas where there may be a
higher risk of material misstatement?
3. Is the impact of the assessed risk of material misstatement at the overall
financial statement level on direction, supervision and review expected to
be significant?
4. Are there challenges faced for the engagement team members to
maintain a questioning mind and to exercise professional scepticism in
gathering and evaluating audit evidence?
5. Does the engagement team expect the results of previous audits that
involved evaluating the operating effectiveness of internal control,
including the nature of identified deficiencies and action taken to address
them, to significantly affect the current year audit?
6. Is the engagement team prohibited from having discussion of matters that
may affect the audit with firm personnel responsible for performing other
services to the entity?
7. Is management unable to commit to the design, implementation and
maintenance of sound internal control, including evidence of appropriate
documentation of such internal control?
8. Are there inadequate internal controls throughout the entity and/or
management does not place emphasis on the importance of internal
control throughout the entity?
Client: Ref:
Year end: C2
WP
Ref
9. Is the volume of transactions significant, which may determine whether it

is more efficient for the auditor to rely on internal control for the audit of
certain specific account balance or transactions?
10. Are there any significant business developments affecting the entity,
including changes in information technology, business processes,
changes in key management, and acquisitions, mergers and divestments?
11. Are there any significant industry developments such as changes in
industry regulations, new reporting requirements and changes to the
environment where the entity operates?
12. Are there any significant changes in the financial reporting framework,
such as changes in accounting standards?
13. Are there any other significant relevant developments, such as changes in
the legal environment affecting the entity?
d. Ascertain the nature, timing and extent of resources necessary to perform the engagement.
WP
Ref
1. Are there any challenges forming the engagement team (including, where
necessary, the engagement quality control reviewer) or the assignment of
audit work to the team members, including the assignment of
appropriately experienced team members to areas where there may be
higher risks of material misstatement?
2. Does the engagement team have concerns over the engagement budget,
including considering the appropriate amount of time to set aside for areas
where there may be higher risks of material misstatement?
For any of the “Yes” responses above, indicate the work paper reference in which the matter would be evaluated in
greater details with a view to identify any potential audit risk and how it would affect the timing and direction of the
audit.
Initial (Planning)
Date: Date:
Final update

Date: Date:
Client: Ref:
Year end: C2.1
QUALITY REVIEW
Comments WP Ref
1. Consider whether there is a need under the firm's procedures, ethical
requirements or SSQC1 for an engagement quality control review by
a second partner or external consultants.
2. Agree the timing and scope of the review with the partner (or other
external consultants) who will be undertaking it.
3. Confirm that the time budget and completion timetable have been
updated accordingly.
4. Have the points raised in a cold review conducted in the previous
year, where applicable, been incorporated into this period's planning?
Initial (Planning)
Date: Date:
Final update
Date: Date:
Client:
Year end:
DETERMINING OVERALL MATERIALITY

The determination of what is material is a matter of professional judgement. The percentage benchmarks set out below are
intended to provide guidance in exercising that judgement. They should not be used as a mere mathematical formula to
'calculate' materiality.
Yes
1. Is this an initial engagement?
2. For recurring engagements, is there any change in the response to the
considerations for selection of benchmark in prior year?
A. Selection of benchmark for determining overall materiality
In selecting the appropriate benchmark for determining overall materiality, the auditor should consider the following:
1. Nature of entity, where the entity fits in the life cycle (growing, mature, declining, etc.), and the industry and economic environ
which the entity operates.
2. How is the entity being financed?
3. Who are the likely users of the financial statements?
4. What are the major elements of the financial statements that will be of interest to users? (i.e. assets, liabilities, equity, income
expenses)
5. Is the proposed benchmark volatile?
6. What information in financial statement items (benchmark) would attract the most attention by users?
B. Recommended materiality ranges for the respective benchmark
Benchmark Materiality percentage range
Profit from continuing operations 3% to 7%

Revenues or expenditures 1% to 3%
Assets 1% to 3%
Equity 3% to 5%
C. Based on the above evaluation considerations, the following benchmark and materiality percentage are appropri
Initial assessment (planning)
1. Selected benchmark

2. Selected materiality percentage (%)
3. Anticipated results of benchmark* ($)
* Consider if adjustments are necessary for, including but not limited to, e.g. significant changes in the circumstances of the entity (for example, a
business acquisition) and relevant changes of conditions in the industry or economic environment in which the entity operates, and circumstances
to an exceptional decrease or increase in profits.
4. Document justification for selection of benchmark and selected materiality percentage.
5. Is there any specific user expectations? If yes, identify any specific user expectations and consider if there is a need for a low
materiality level or levels for particular classes of transactions, account balances or disclosure (“Section materiality”).
6. Selected materiality ($)
D. Determining Clearly trivial threshold
1. Clearly trivial threshold percentage (%)

2. Calculated clearly trivial threshold ($) (Overall materiality * CTT %)
Clearly trivial threshold (CTT) is set such that the audit team is able to aggregate and evaluate the cumulative effect of uncorrecte
misstatements above CTT. Misstatements not aggregated would have to be clearly trivial and hence not accumulated because th
expects that the accumulation of such amounts clearly would not have a material effect on the financial statements. Audit team sh
determine carefully the CTT percentage and document justification for the selected percentage, or any revision.
Conclusion (planning)
Based on the anticipated results, I am satisfied that the above figure represents an appropriate initial overall materiality.
Prepared by:
Initial Date
E. Final Review of overall materiality

Final assessment
1. Selected benchmark

2. Selected materiality percentage (%)
3. Final audited results of benchmark* ($)
4. Selected overall materiality ($)
5. Consider whether the selection of benchmark and selected materiality percentage remains appropriate.
Conclusion (Final)
Based on the final results, I am satisfied that the above figure represents an appropriate overall materiality.
Date: Date:
Ref:
C3
benchmarks set out below are

e mathematical formula to
No Comments
For ‘Yes’, proceed

to A.
For ‘Yes’, proceed

to update A.
For ‘No’, proceed

to B.
Guidance template – determining overall materiality
1. Table for presenting current and past results.
CY
Proposed
(Anticipated PY1
benchmark
results)
Profit from continuing
ould consider the following:
operations
.), and the industry and economic environment in Revenue or
expenditures
Assets
Equity
ers? (i.e. assets, liabilities, equity, income, and
tention by users?
Materiality percentage range
3% to 7%
1% to 3%
1% to 3%
3% to 5%
nd materiality percentage are appropriate:
Prior period materiality

he circumstances of the entity (for example, a significant
which the entity operates, and circumstances that give rise
ge.
s and consider if there is a need for a lower

osure (“Section materiality”).
Prior period materiality
Amount
1% to 5%
aluate the cumulative effect of uncorrected

al and hence not accumulated because the auditor
on the financial statements. Audit team shall
entage, or any revision.
opriate initial overall materiality.
Reviewed by:
Initial Date
mains appropriate.
overall materiality.
mining overall materiality
ast results.
PY2 PY3 PY4 PY5

Client: Ref:
Year end: C4
UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT
1. GENERAL
DESCRIPTION Comment WP Ref
Entity background
i. Review the permanent audit file for risk factors identified during
client acceptance and continuance process.
Where there is risk identified during the client acceptance and
continuance process, follow up and obtain further information
during audit planning and summarise the risk identified to
C8.1/C8.2.
ii. Review the Points Carried Forward to Next Year’s Audit schedule B9
from previous year (A9 on previous file). File a copy in the current
year's working paper file.
iii. Review correspondence files and note relevant points arising
during the year.
Consider the following questions and, where applicable, determine if these represent specific risks.
Considerations, including but not limited to:

a. Was the previous period's auditor’s report qualified?
b. Was there any fundamental uncertainty in the previous period’s auditor’s report?
c. Are there any events or conditions that may cast significant doubt on the entity's ability to continue as a
going concern?
d. Where management has considered appropriateness of going concern assumption, does this
assessment identify any significant doubts about the entity's ability to continue as a going concern?
e. Does the engagement team have any concerns with regard to the integrity of the
directors/management?
f. Is the relationship with the client 'abrasive' and/or 'deteriorating'?
g. Are there any untrained or inexperienced employees holding key accounting roles?
h. Is there any significant external interest in the entity’s financial statements?
i. Are there any other risk factors that may affect the client at the financial statement level?
2. RELEVANT INDUSTRY, REGULATORY, AND OTHER EXTERNAL FACTORS INCLUDING THE

APPLICABLE FINANCIAL REPORTING FRAMEWORK
A. Industry factors
Consider the following questions when describing the industry condition, and, where applicable, determine if
these represent specific risks.

a. Is the entity in a highly competitive or volatile sector of the economy?
b. Is the entity affected by cyclical or seasonal factors?
c. Is there a risk of technological obsolescence of products or services?
d. Is the entity's business affected by fashion, demographic trends or public opinion?
Fraud-related considerations
e. Is there high degree of competition or market saturation, accompanied by declining margins?
f. Is there rapid growth or unusual profitability especially compared to that of other companies in the same
industry
g. Is there high vulnerability to rapid changes, such as changes in technology, product obsolescence, or
interest rates?
h. Are there significant declines in customer demand and increasing business failures in either the industry
or overall economy?
i. Is there a strong financial presence or ability to dominate a certain industry sector that allows the entity
to dictate terms or conditions to suppliers or customers that may result in inappropriate or non-arm's
length transactions?
B. Regulatory factors
DESCRIPTION Yes No WP Ref
Laws and regulations
i. Check that we considered the effects of non-compliance with
relevant laws and regulations in determining our overall audit
approach.
ii. Check that the register of significant laws and regulations
contained on the permanent file (PAF1.2) is up-to-date.
Consider the following questions when describing the regulatory environment, and, where applicable,
determine if these represent specific risks.

a. Are there any sales commissions or agent’s fees that appear excessive in relation to those ordinarily
paid by the entity or in its industry or to the services actually received?
b. Is there any adverse media comment over the entity’s business practice?
c. Are there any payments for unspecified services or loans to consultants, related parties, employees or
government employees?
d. Is a copy of the financial statements required to be filed with a trade association or regulator?
e. Does the client operate in a business sector where there is likely to be additional regulations?
f. Is there any change in legislations that would have an impact on the entity?
g. Are there any investigations by regulatory organisations and government departments or payment of
fines or penalties?
h. Are there any new statutory or regulatory requirements?
i. Are there any known history of violations of laws and regulations, or claims against the entity, its senior
management, or those charged with governance alleging fraud or violations of laws and regulations?
j. Is there any interest by management in employing inappropriate means to minimise reported earnings
for tax-motivated reasons
Uplift the following information from PAF1.2 (Laws and regulations) and reference to the work paper where the
engagement team will perform the audit procedures and document the work done to ensure compliance with
the provisions of laws and regulations generally recognised to a direct effect on the determination of material
amounts and disclosures in the financial statements.
State the legal and

Procedures in place
regulatory framework
to ensure compliance WP ref
that affects the entity
(Per entity – PAF1.2) (Per entity – PAF1.2)

1. Laws and regulations that have direct
impact on financial statements
(e.g. Companies Act; Income tax Act; GST Act;
Charities Act; etc.)
(e.g. Companies Act; Income tax Act; GST Act;
Charities Act; etc.)
C. Other external factors

Consider the following questions when describing other external factors affecting the entity, and, where
applicable, determine if these represent specific risks.

a. Will the financial statements be sent to a third party?
b. Are there any individually material third-party creditors?
c. Is there any expectation that the business (or part of it) may be sold in the near future?
d. Are there any external factors (e.g. a potential listing or bank financing) which could influence expected
results?
e. Is there operating losses making the threat of bankruptcy, foreclosure, or hostile takeover imminent?
f. Are the profitability or trend level expectations of investment analysts, institutional investors, significant
creditors, or other external parties (particularly expectations that are unduly aggressive or unrealistic),
including expectations created by management in, for example, overly optimistic press releases or
annual report messages?
g. Are there perceived or real adverse effects of reporting poor financial results on significant pending
transactions, such as business combinations or contract awards?
h. Is there a practice by management of committing to analysts, creditors, and other third parties to
achieve aggressive or unrealistic forecasts?
3. NATURE OF THE ENTITY
A. Operations
Consider the following questions when describing the business operations, and, where applicable, determine if

a. Are there a large number of business locations and/or a wide geographical spread of its activities?
b. Is the entity reliant on only a few customers or suppliers?

c. Is the entity heavy reliant on particular products or services?
d. Does the entity carry out any research or development activities?
e. Are there any significant related parties to the business?
f. Are there any complex situations which might require the use of the work of an expert?
g. Is there any use of business intermediaries for which there appears to be no clear business
justification?
B. Ownership and governance structures

Consider the following questions when describing the ownership and governance structures, and, where

a. Is there a complex ownership structure?
b. Are there poor governance structures?
c. Is there any instance where the monitoring of management is not effective as a result of the oversight
by those charged with governance over the financial reporting process and internal control being not
effective?
d. Is there a complex or unstable organisation structure, as evidenced by the following:
> Difficulty in determining the organisation or individuals that have controlling interest in the entity;
> Overly complex organisational structure involving unusual legal entities or managerial lines of
authority;
> High turnover of senior management, legal counsel, or those charged with governance.
e. Is there any instance where the owner-manager makes no distinction between personal and business
transactions?
f. Is there any dispute between shareholders in a closely held entity?
C. Types of investments
Consider the following questions when describing the entity’s investments, and, where applicable, determine if

a. Were there any acquisitions, mergers or disposals of business activities in the period or after the year-
end?
b. Does the entity have any investments in securities or loans?
c. Does the entity have any investments in non-consolidated entities, including partnerships, joint ventures
and special-purpose entities?
d. Are there any significant operations located or conducted across international borders in jurisdictions
where differing business environments and cultures exist?
D. Structure of entity and how it is financed

Consider the following questions when describing the entity’s financing and financing activities, and, where

a. Does the entity have a complex capital structure?
b. Are there any issues arising from the entity's debt structure, including covenants, restrictions,
guarantees, or off-balance-sheet financing arrangements?
c. Does the entity use derivative financial instruments?
d. Are there any risks of material misstatement at the assertion level related to the fair value
measurements and disclosures in the financial statements?
e. Are there recurring negative cash flows from operations or an inability to generate cash flows from
operations while reporting earnings and earnings growth?
f. Is there need to obtain additional debt or equity financing to stay competitive, including financing of
major research and development or capital expenditures?
g. Does the entity exhibit marginal ability to meet debt repayment or other debt covenant requirements?
4. ENTITY'S SELECTION AND APPLICATION OF ACCOUNTING POLICIES

Consider the following questions when describing the financial reporting, and, where applicable, determine if

a. Have generally accepted accounting principles been complied with in the past years?
b. Are the accounting policies for significant matters appropriate to the circumstances of the entity? For
example consider: Valuation of property; income recognition; depreciation; long term contracts.
c. Could the treatment of any areas in the financial statements be disputed by the tax authorities?
d. Consider the degree of estimation uncertainty associated with accounting estimates such as allowance
for doubtful debts; inventory obsolescence; warranty obligations; depreciation method or asset useful
life; carrying value of investments; outcome and stage of completion of long term contracts; costs
arising from litigation; share-based payments; and financial instruments not traded in an active and
open market.
e. Has management appropriately applied the requirements of the applicable financial reporting framework
relevant to accounting estimates?
f. Are the methods for making the accounting estimates appropriate and have been applied consistently?
g. Are there any changes from the prior period in the method for making accounting estimates are
appropriate in the circumstances?
h. Are specialised skills or knowledge in relation to one or more aspects of the accounting estimates are
required in order to obtain sufficient appropriate audit evidence?
i. Is there any change in accounting standards that would have an impact on the entity?
j. Are there any unusual payments in cash, purchases in the form of cashiers’ cheques payable to bearer
or transfers to numbered bank accounts?
k. Are there any purchases at prices significantly above or below market price?
l. Are there any unusual transactions with companies registered in tax havens?
m. Are there any payments for goods or services made other than to the country from which the goods or
services originated?
n. Are there any payments without proper exchange control documentation?
o. Are there assets, liabilities, revenues, or expenses based on significant estimates that involve
judgement or uncertainties that are difficult to corroborate?
p. Are there significant, unusual, or highly complex transactions, especially those close to period end that
pose difficult "substance over form" questions?
q. Is there non-financial management's excessive participation in or preoccupation with the selection of
accounting policies or the determination of significant estimates?
r. Are there new accounting requirements?
s. Is there recurring attempts by management to justify marginal or inappropriate accounting on the basis
of materiality?
5. ENTITY'S OBJECTIVES, STRATEGIES, AND RELATED BUSINESS RISKS

Consider the following questions when describing the entity’s objective, strategies and related business risks,
and, where applicable, determine if these represent specific risks.

a. Has the engagement team reviewed a copy of the entity's long term strategy or business plan, if
available?
b. Are there any risks arising from the entity attempting to achieve the objectives set out in the plan?
c. Is there a risk of failure to meet stakeholder expectations (which management may have encouraged)
whether or not the expectations were reasonable?
d. Are the directors' and/or managements' incomes highly geared to results?
e. Is there pressure to meet targets to check protection of the jobs of directors, management or other
employees?
f. Is there a desire to understate profits to reduce tax liabilities?
g. Are there legal or regulatory requirements to meet specific financial thresholds or ratios?
h. Is there a need to check compliance with loan covenants or to entice bankers?
i. Are future plans for selling the entity dependent upon achieving specified results?
j. Are the amounts for provisions set by management at the time of finalising the profit and loss account
rather than being determined by others as part of the routine accounting system?
k. Is there a pattern whereby accounting judgement and estimates made when finalising the financial
statements are all biased in the direction management desires?
l. Are the final account balances for the entity subject to significant change as a result of journal
adjustments?
m. Were there any contracts or transactions undertaken, particularly where this was close to the year end,
where the commercial rationale is unclear?
n. Do the accounting policies applied by the entity fall comfortably within applicable accounting standards
or do they push the boundaries of acceptability in some areas?
o. Have the directors brought forward the reporting date without good reason making it difficult to obtain
the quantity and quality of audit evidence required?
p. Are the results of the entity out of step with industry trends with no reasonable explanation available?
q. Is management keen to manipulate profits (e.g. to reduce tax or increase bonuses)?

r. Information available indicates that the personal financial situation of management or those charged
with governance is threatened by the entity’s financial performance arising from the following:
> Significant financial interests in the entity;
> Significant portions of their compensation (for example, bonuses, stock options, and earn-out
arrangements) being contingent upon achieving aggressive targets for stock price, operating
results, financial position, or cash flow; and
> Personal guarantees of debts of the entity.
s. Is there excessive pressure on management or operating personnel to meet financial targets
established by those charged with governance, including sales or profitability incentive goals?
t. Are there significant bank accounts or subsidiary or branch operations in tax-haven jurisdictions for
which there appears to be no clear business justification?
u. Is there excessive interest by management in maintaining or increasing the entity's net worth or
earnings trend?
v. Is there low morale among senior management?
w. Are there personal financial obligations which may create pressure on management or employees with
access to cash or other assets susceptible to theft to misappropriate those assets?
x. Is there adverse relationships between the entity and employees with access to cash or other assets
susceptible to theft may motivate those employees to misappropriate those assets. For example,
adverse relationships may be created by the following:
> Known or anticipated future employee layoffs;
> Recent or anticipated changes to employee compensation or benefit plans; and
> Promotions, compensation, or other rewards inconsistent with expectations.
y. Is there any behaviour indicating displeasure or dissatisfaction with the entity or its treatment of the
employee?
z. Are there any changes in behaviour or lifestyle that may indicate assets have been misappropriated?
6. MEASUREMENT AND REVIEW OF THE ENTITY'S FINANCIAL PERFORMANCE

Consider the following questions when describing measurement and review of the entity's financial
performance, and, where applicable, determine if these represent specific risks.

a. Have accounting records been reliable in the past?
b. Are meaningful management accounts prepared during the year?
c. Has the audit report contained a qualification in either of the last two years?
d. Have there been problems with making adjustments in the past?
e. Is the engagement ‘stable’ i.e. long standing?
f. Is the relationship between management and the current or predecessor auditor strained, as exhibited
by the following:
> Frequent disputes with the current or predecessor auditor on accounting, auditing, or reporting
matters?
> Unreasonable demands on the auditor, such as unrealistic time constraints regarding the
completion of the audit or the issuance of the auditor's report?
> Restrictions on the auditor that inappropriately limit access to people or information or the
ability to communicate effectively with those charged with governance?
> Domineering management behaviour in dealing with the auditor, especially involving attempts
to influence the scope of the auditor's work or the selection or continuance of personnel
assigned to or consulted on the audit engagement?
7. OTHER MATTERS AFFECTING THE BUSINESS
8. FRAUD AND ERROR

Consider ‘Yes’ responses and document whether these represent specific risk.
Considerations, including but not limited to: Yes No N/A

a. Have there been any previous experiences or incidents which call
into question the integrity or competence of management?

b. Are there any unusual financial or reporting pressures within the
business?
c. Are there any significant weaknesses in the design or
implementation of internal controls?
d. Is there a history of unusual and/or complex transactions?
e. Is there a history of problems in obtaining sufficient appropriate
audit evidence?
f. Are there inadequate controls over data in the information
system?
g. Is there a high degree of judgement involved in determining
account balances?
h. Are there a large number of assets which may be susceptible to
loss or misappropriation?
i. Do the results of analytical procedures undertaken to obtain an
understanding of the entity and its environment show unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud?
j. Are there usually a large number of transactions not subjected to
ordinary processing?
k. Are the finance personnel well trained and capable of performing
the tasks allocated to them?
l. Are there any attitude or morale problems in the accounting
department?
m. Is there a high level of turnover of accounting staff, senior
management or professional advisors?
n. Does any other information obtained indicate any risk of material
misstatement due to fraud?
o. Is there a business rationale for any transactions that are not in
the ordinary course of business?
9. RELATED PARTY TRANSACTIONS

Consider ‘Yes’ responses and document whether these represent specific risk.
Considerations, including but not limited to: Yes No N/A
a. Are there usually a large number of related party transactions?
b. Is the entity a member of a group that does not prepare group

financial statements?
c. Are any payment made to the directors/shareholders other than
remuneration or dividends?
d. Were there balances due to or from the directors at any time
during the year?
e. Is there any indication of risk of misstatement at the assertion
level for classes of transactions, account balances or disclosures?

f. Are there any significant related party transactions outside the
normal course of business?
g. Are there any non-management related parties?
h. Is any related party in a position to override any controls in
existence?
i. Is there a history of undisclosed related parties or related party
transactions?
j. Is any related party in a position to exert dominant influence over
the entity or is there any indication that a related party has
exercised dominant influence over the entity?
k. Are there significant related-party transactions not in the ordinary
course of business or with related entities not audited or audited
by another firm?
10. SUMMARISE SPECIFIC RISKS AFFECTING THE ENTITY ARISING FROM ABOVE RISK ASSESSMENT
TO C8.1/C8.2
Financial
Affects risk at overall
Statements
Description of risks identified FS, or assertion Assertions affected
accounts
level?
affected
Initial (Planning)
Date: Date:
Final update

Date: Date:
Client: Ref:
Year end: C5
INTERNAL CONTROLS
1. CONTROL ENVIRONMENT
Consider the following questions when documenting our understanding of the control environment and, where
applicable, determine if these represents specific risks.

Communication and Enforcement of Integrity and a) Has management created and maintained a
Other Ethical Values culture of honesty and ethical behaviour?
b) Is there effective communication,
implementation, support, or enforcement of the
entity's values or ethical standards by
management or the communication of
inappropriate values or ethical standards?
c) Do management and administrative controls
appear weak/ineffective?
d) Is there high tolerance for theft in the entity?
Commitment to Competence e) Does management compromise on competence
and integrity?
f) Is the extent of management knowledge and
experience sufficient for operating the business?

Participation by Those Charged with Governance g) Are the majority of TCWG independent from
(TCWG) management?
h) Does TCWG have appropriate experience,
stature and financial expertise?
i) How often are significant issues and financial
results being communicated to TCWG?
j) Does the TCWG provide effective oversight over
management’s activities?
k) Does TCWG meet on a regular basis, and are
minutes of meetings being circulated in a timely
basis?
Management’s Philosophy and Operating Style l) Do the strengths in the control environment
elements collectively provide an appropriate
foundation for the other components of internal
control?
m) Are other components of internal control
undermined by deficiencies in the control
environment?
Organisational Structure n) Is the monitoring of management is not effective
as a result of domination of management by a
single person or small group (in a non-owner-
managed business) without compensating
controls?
o) Is potential for dominant influence to be exerted
over the entity by any related party?
Assignment of Authority and Responsibility p) Is management in a position to override any
controls in existence?
q) Does the entity engage legal advisors to assist in
monitoring legal requirements?
Client: Ref:
Year end: C5

Human Resources Policies and Practices r) Does the entity develop, publish and follow the
code of conduct?
s) Does the entity ensure the employees are
properly trained and understand the code of
conduct?
A. Evaluate risk of management override of control

(i) Obtain understanding over the use of journal entries
Consider the following questions when documenting our understanding over the journal entries recorded
in the general ledger and other adjustments made in the preparation of the financial statements, and,
where applicable, determine if these represents specific risks.

i. Are journal entries processed manually or electronically?
ii. Are there controls over physical access and processing of journal entries?
iii. Is there proper segregation of duties over the preparation and approval of journal entries?
iv. Are journal entries processed at the subsidiary ledger level?
v. Are there any indications that there are inappropriate or unusual activity relating to the processing
of journal entries and other adjustments?
vi. Are there significant number of journal entries processed at the end of the financial period?
vii. Are there unusual account code (e.g. suspense account; temporary/balancing account; etc.) used
in the general journal?
viii. Are there journal entries processed at the general ledger for transactions that would ordinarily be
processed at the subsidiary ledger level?
Inquiry with individuals involved in the financial reporting process:
Any instances of
inappropriate or unusual
activity relating to the
Name of entity Designation/Job
Date of inquiry processing of journal
personnel scope
entries and other
adjustments?
(Yes/No)
For yes response above, obtain details of the incident and determine if it represents specific risk.
Client: Ref:
Year end: C5
(ii) Review Accounting Estimates/Judgement for Management Bias

Consider possible management bias over significant accounting estimates/judgement and assess the risk
of material misstatement due to fraud and error at assertion level or financial statements level:
State the area where
Risk of management bias over
significant accounting
Significant accounts significant accounting
estimates/judgement would
estimates/judgement? (Y/N)
be involved
a)
b)
c)
2. ENTITY'S RISK ASSESSMENT PROCESS

Consider the following questions when documenting our understanding of the entity’s risk assessment process
and, where applicable, determine if these represents specific risks.

a) Will the entity's risk assessment process be used in identifying relevant risks and the actions taken in
response to them?
b) Does the entity maintain a register of significant laws and regulations with which the entity has to comply
within its particular industry and a record of complaints?
c) A risk assessment process would normally address such matters as:
> Changes in operating environment;
> New senior personnel;
> New or revamped information systems;
> Rapid growth;
> New technology;
> New business models, products, or activities;
> Corporate restructurings (including divestitures and acquisitions);
> Expanded foreign operations; and
> New accounting pronouncements.
Client: Ref:
Year end: C5
3. THE INFORMATION SYSTEM, INCLUDING THE RELATED BUSINESS PROCESSES, RELEVANT TO

FINANCIAL REPORTING, AND COMMUNICATION
Consider the following questions when documenting our understanding of the information systems and
communication, and, where applicable, determine if these represents specific risks.

General a) Are management information systems in
existence and effective?
b) Is there existence of an information system which
fails, whether by design or by accident, to provide
an adequate audit trail or sufficient evidence?
c) Are the accounting records kept up to date?
d) Has there been any change to the accounting
system?
e) Are there any particular issues arising from the
use of IT that give cause for concern?
f) Are internal control components are deficient as
a result of accounting and information systems
that are not effective, including situations
involving significant deficiencies in internal
control?
Sources of information used g) What classes of transactions are significant to
the financial statements?
h) How do transactions originate within the entity’s
business processes?
i) What accounting records (electronic or manual)
exists?
j) How does the system capture events and
conditions (other than classes of transactions)
that are significant to the financial statements?
How information is captured and processed k) What are the financial reporting processes used
to initiate, record, process, and report
transactions and non-standard transactions (such
as related party transactions, etc.)
l) What are the financial reporting processes used
to prepare the financial statements, including
significant accounting estimates and disclosures?

m) What procedures address risks of material
misstatement associated with inappropriate
override of controls, including use of standard
and non-standard journal entries?
n) What procedures address override of suspension
of automated controls
o) What procedures address identification of
exceptions and reporting the actions that have
been taken to remedy these?
Client: Ref:
Year end: C5

How the information produced is used p) How does the entity communicate financial
reporting roles, responsibilities, and significant
matters relating to financial reporting?
q) What reports are regularly produced by the
information system, and how are they used to
manage the entity?
r) What information is provided by management to
TCWG (if different from management) and to
external parties such as regulatory authorities?
4. CONTROL ACTIVITIES
Consider the following questions when documenting our understanding of the control activities and, where

General a) Are there inadequate internal control over assets
may increase the susceptibility of
misappropriation of those assets. For example,
misappropriation of assets may occur because
there is the following:
> Inadequate segregation of duties or
independent checks;
> Inadequate oversight of senior management
expenditures, such as travel and other
re¬imbursements;
> Inadequate management oversight of
employees responsible for assets, for
example, inadequate supervision or
monitoring of remote locations;
> Inadequate job applicant screening of
employees with access to assets;
> Inadequate record keeping with respect to
assets;
> Inadequate system of authorisation and
approval of transactions (for example, in
purchasing);
> Inadequate physical safeguards over cash,
investments, inventory, or fixed assets;
> Lack of complete and timely reconciliations
of assets;
> Lack of timely and appropriate
documentation of transactions, for example,
credits for merchandise returns;
> Lack of mandatory vacations for employees
performing key control functions;
> Inadequate management understanding of
information technology, which enables
information technology employees to
perpetrate a misappropriation; and
> Inadequate access controls over automated

records, including controls over and review
of computer systems event logs.
Client: Ref:
Year end: C5

Authorisation controls b) Are there defined/assigned responsibility to
authorise/approve routine and non-routine
transactions and events?
c) Are account reconciliations being prepared and
reviewed on a timely basis, and taking any
necessary corrective actions?
d) Are there any unauthorised transactions or
improperly recorded transactions?
e) Are there instances of disregard for internal
control over misappropriation of assets by
overriding existing controls or by failing to take
appropriate remedial action on known
deficiencies in internal control?
Performance reviews f) How often does the management review and
analyse actual results versus budgets, forecasts,
and prior-period performance?
g) Does management analyse operating and
financial data with one another, and compare
internal data with external sources of
information?
h) Does the management investigate unexpected
variations and take corrective actions?
Information processing i) Are there controls, whether fully automated or
partially automated, programmed into IT
applications such as sales or purchases?
Physical controls j) Are there controls over the physical security of
assets, permitted access to entity premises,
accounting records, computer programs and data
files?
Segregation of duties k) Are there any indications that control activities
such as performance reviews or segregation of
duties have broken down or otherwise failed to
operate?
l) Are internal control components are deficient as
a result of high turnover rates or employment of
accounting, internal audit, or information
technology staff that are not effective?
m) Are there such characteristics or circumstances
which may increase the susceptibility of assets to
misappropriation. For example, opportunities to
misappropriate assets increase when there are
the following:
> Large amounts of cash on hand or
processed;
> Inventory items that are small in size, of high
value, or in high demand;
> Easily convertible assets, such as bearer
bonds, diamonds, or computer chips; and
> Fixed assets which are small in size,
marketable, or lacking observable
identification of ownership.
Client: Ref:
Year end: C5

General IT controls n) Standards, planning, policies etc. Describe the
following:
> IT governance structure;
> How IT risks are identified, mitigated, and
managed;
> Required information system, strategic plan
(if any), and budget;
> IT policies, procedures, and standards;
> Organisational structure and segregation of
duties; and
> Contingency planning;
o) Security over data, the IT Infrastructure, and daily
operations. Describe the following:
> Acquisition, installations, configurations,
integration, and maintenance of the IT
infrastructure;
> Delivery of information services to users;
> Management of third-party providers;
> Use of system software, security software,
database-management systems, and utility
programs; and
> Incident tracking, system logging, and
monitoring functions.
p) Access to programs and application data.
Describe the following:
> Issuance/removal and security of user
passwords and IDs;
> Internet firewalls and remote-access controls;
> Data encryption and cryptographic keys;
> User accounts and access-privilege
controls; and
> User profiles that permit or restrict access.
q) Program development and program changes.
Describe the following:
> Acquisition and implementation of new
applications;
> System development and quality-assurance
methodology; and
> Maintenance of existing applications,
including controls over program changes.
r) Monitoring of IT operations. Describe the
following:
> Policies, procedures, inspections, and
exception reports ensuring that:
• Information users are receiving accurate
data for decision-making;
• Ongoing compliance with general IT controls;
and
• IT is serving the entity’s needs and aligned
with the business requirements.
IT application controls s) Describe the applications controls, preventive or
detective in nature, which are designed to ensure
the integrity of the accounting records by
ensuring that the transactions occurred, are
authorised, and are completely and accurately
recorded and processed.
Client: Ref:
Year end: C5
5. MONITORING OF CONTROLS
Consider the following questions when documenting our understanding of the monitoring controls, and, where

i. Are there any indications that the system of monitoring controls in place is ineffective?
ii. Are there any indications that the monitoring controls have broken down or otherwise failed to operate?
iii. Does the entity monitor compliance with the code of conduct and act appropriately to discipline
employees who fail to comply with it?
iv. Does the entity monitor legal requirements and ensure that operating procedures are designed to meet
these requirements?
v. Are internal control components are deficient as a result of inadequate monitoring of controls, including
automated controls and controls over interim financial reporting (where external reporting is required)?
vi. Are there any instances where management fail to remedy known significant deficiencies in internal
control on a timely basis? Consider follow up action on B8.
vii. Are there instances of disregard for the need for monitoring or reducing risks related to misappropriations
of assets?
6. SIGNIFICANT BUSINESS CYCLES

For business cycles identified as significant, proceed to C5.1 Understanding the Design of Internal Controls to
identify the key systems internal controls relevant to the audit.
Are the design of Are we satisfied that the
internal controls over internal controls over
Significant the account the account Control risk classification
Account
business cycle balance/transactions balance/transactions (L/M/H)
expected to be had been implemented?
reliable? (C5.1) (C5.2)
7. CONTROL DEFICIENCIES
Identified any control deficiencies from C5.1/C5.2, and prior year letter of comments (B8)? If yes, state the
control deficiencies below.
Client: Ref:
Year end: C5
8. CONCLUSION
Based on understanding of the internal control components documented above, indicate the conclusion as to
whether the identified internal controls are conducive to effective and reliable processing of the financial
statements.
9. SUMMARISE SPECIFIC RISKS AFFECTING THE ENTITY ARISING FROM ABOVE RISK ASSESSMENT
TO C8.1/C8.2
Description of control risks Affects risk at overall Financial Statements
Assertions affected
identified FS or assertion level? accounts affected
10. AUDIT APPROACH

Consider whether any changes are required to the initial audit approach in the light of the results of the firm's
monitoring process from above. (Transfer to C2 Audit Strategy)
Initial (Planning)

Date: Date:
Final update
Date: Date:
Client: Ref:
Year end: C5.1
UNDERSTANDING THE DESIGN OF INTERNAL CONTROLS
A. BANK
Taking into consideration the questions below, document the design of the key controls below (using
narrative, flowchart or combination, etc.). Comment on the effectiveness of the design of the internal
control and identify any control weakness (where applicable).
1. Recording of cash/cheque
a. Are the duties of the person writing/posting the cash book separated from the person
responsible for the general ledger, making payments or handling receipts and checking the
bank reconciliations?
b. Are cash book balances regularly reconciled to the general ledger control account?
c. Does a senior member of the client's staff independently check bank reconciliations?
2. Custody of cash/cheque
a. Is there adequate security over blank cheques and procedures to check that under no
circumstances should pre-signed cheques be maintained?
b. Are cash counts undertaken on a regular basis, without the person in charge of petty cash
being aware that they are going to be undertaken?
3. Mailing of cheque
a. Are cheques dispatched immediately after signature and not returned to the person who has
prepared them?
B. INVENTORIES
1. Raise requests for goods

a. Is there independent approval to ensure that the request is for business purpose?
b. Does the company maintain purchase order requisitions, which are pre-numbered,
authorised and controlled?
2. Receipt of goods and recording of goods receipt
a. Is there independent matching of goods in with purchase documentation?
b. Does the client maintain pre-numbered goods received notes (GRN) and carry out regular
checking for missing numbers?
3. Storage at warehouse
a. Is there restricted access to inventories and physical security over the inventories?
b. Are regular reconciliations of actual inventories-to-inventories records undertaken?
c. Is there a system for the reporting of slow, obsolete or damaged inventories to relevant
levels of management?
d. Is there a record of an authorisation of scrapped/damaged goods?
e. Will the entity perform inventory count at the year-end date?
4. Issue of goods and recording of goods issued
a. Is there an independent check on all dispatches, including any made by persons other than
those responsible for the inventories?
b. Is there independent matching of goods out with sales documentation?
c. Does the client maintain pre-numbered inventories requisition notes, and carry out regular
checking for missing numbers?
d. For significant inventories on consignment, are regular reconciliations being performed
between customer usage and list of consigned inventories?
e. For significant inventories held by third party, are regular reconciliations being performed
between inventory movement report from third party and entity’s inventory records?
Client: Ref:
Year end: C5.1
C. PROPERTY, PLANT & EQUIPMENT

1. Acquisition
a. Are minutes and resolutions maintained of all board meetings and management meetings
authorising capital expenditure?
b. Does the company maintain fixed asset purchase order requisitions, which are pre-
numbered, authorised and controlled?
2. Receiving
a. Is there independent matching of assets received with purchase documentation?
3. Recording
a. Is there evidence to show that the purchase invoices have been checked for accuracy and
that the accounting code has been checked before the items are posted to the general
ledger?
4. Custody
a. Is the fixed asset register regularly reconciled to the general ledger account, and also to
actual physical assets?
b. Is there evidence to show that there have been regular inspections of the condition and use
of assets?
5. Disposal
a. Are minutes and resolutions maintained of all board meetings and management meetings,
authorising disposals?
b. Is there independent checking of calculations of profits and losses on disposal?
D. SALES CYCLE
1. Receiving customer order and processing sales order

a. Does the business have some form of control over who they sell goods to on credit?
b. Is there prior approval by the credit department of all sales before the goods are actually
dispatched?
2. Delivery of goods/services
a. Is there a periodic separate check of the goods that have been dispatched to check that they
agree with the purchase order details and the invoice details?
b. Are dispatch notes independently checked to invoices?
3. Billing of goods/services and recording of sales
a. Does the client use sequentially numbered invoices?
b. Are invoices only raised when the invoicing department is given a valid order or dispatch
note?
c. Is invoice pricing independently checked and reviewed?
d. Is there prompt billing of all sales?
e. Are sales ledger control account reconciliations carried out independently?
4. Collection of receipts
a. Is effective credit control exercised over outstanding balances?
Client: Ref:
Year end: C5.1
E. PURCHASES CYCLE
1. Raise purchase order and placement of order with supplier

a. Are purchases are authorised and within approval limits?
2. Receipt of goods/services
a. Are there controls in place to monitor goods received before placing new orders?
b. Are there controls in place to follow up on open purchase orders?
3. Receipt of supplier invoice and recording of expenses
a. Are supplier invoices checked to pre-numbered goods received notes, which in turn are
checked to authorized purchase orders?
b. Are purchase ledger control account reconciliations carried out?
4. Payment
a. Are all purchase invoices approved prior to payment?
b. Are purchase invoices marked paid when they are being paid to prevent them from being
entered into the system again?
c. Are supplier statement reconciliations carried out where available?
F. PAYROLL
1. Recording and updating of personnel records

a. Does an independent department keep proper personnel records?
b. Does the human resource department maintain a formal record of notification of changes in
rates of pay etc?
2. Payment of payroll
a. Is the payroll independently approved for accuracy?
b. Are payroll control account reconciliations carried out by the finance team?
G. INFORMATION TECHNOLOGY
1. Reliability and updating system, programs and data

a. Is there reliance on systems or programs that are inaccurately processing data, processing
inaccurate data, or both?
b. Are all necessary changes to systems or programs made on a timely basis?
2. Authorised access to system, programs and data
a. Are there controls to prevent unauthorised access to data that may result in destruction of
data or improper changes to data, including the recording of unauthorised or non-existent
transactions, or inaccurate recording of transactions? (Note - Particular risks may arise
where multiple users access a common database.)
b. Can personnel gain access privileges to systems beyond those necessary to perform their
assigned duties thereby breaking down segregation of duties?
Client: Ref:
Year end: C5.1
3. Controls over system, programs and data

a. Are there controls to prevent unauthorised changes to data in master files?
b. Are there controls to prevent unauthorised changes to systems or programs?
c. Are there controls to prevent inappropriate manual intervention?
d. Are there controls to prevent potential loss of data or inability to access data as required?
e. Are appropriate back-up and disaster recovery systems in place?
H. GENERAL LEDGER/ FINANCIAL REPORTING PROCESS

1. General
a. Is the culture of the organisation conducive to the effective operation of internal controls?
b. Does management use their influence in the business to promote the effective operation of
internal controls?
2. Financial reporting process
a. Are reliable management accounts produced at least quarterly and reviewed by
management so that significant misstatements would be identified and corrected on a timely
basis?
I. RELATED PARTY TRANSACTIONS

a. Does the entity maintain a list of related parties?

b. Does the entity regularly update the list of related parties?
c. Does the entity communicates the list of related parties to those responsible for financial
reporting to faciliate the identification and recording of related parties transactions?
d. Are all significant related party transactions and transactions outside the ordinary course of
business authorised and approved?
e. Are there mechanisms in place to identify related party transactions and transactions outside
the ordinary course of business?
f. Are there controls in place to check that all related party transactions and relationships are
accounted for and disclosed in accordance with the financial reporting framework?
Client: Ref:
Year end: C5.1
J. SUMMARY OF REVIEW OF DESIGN OF INTERNAL CONTROLS
If yes, perform review of the

Based on the above, is the design
implementation of internal controls to
Key business cycles where of internal controls deemed
establish that the internal controls have
design of internal controls effective?
been implemented
were evaluated (Yes/No)
(WP ref)
C5.2
Where design of key controls are determined as ineffective, identify weaknesses and consider whether it
constitute significant deficiencies. Communicate weakness in internal controls to the relevant management
personnel and to those charged with governance (A8) and consider the effect of such internal control weakness
noted on our assessment of the risk of material misstatements (C8.1/C8.2).
Initial (Planning)
Date: Date:
Final update
Date: Date:
Client: Ref:
Year end: C5.2
REVIEW OF IMPLEMENTATION OF INTERNAL CONTROLS
Description of the design of the internal Description of the procedures performed to test
WP ref
control (C5.1 series) the implementation of the internal controls
Where exceptions are noted in testing the implementation of key controls, determined if these exceptions
represent internal controls deficiencies. Communicate internal controls deficiencies to the relevant
management personnel and to those charged with governance (A8), where appropriate. Consider the effect of
such deficiencies noted on our assessment of the risk of material misstatements (C8.1/C8.2).
Initial (Planning)
Date: Date:
Final update
Date: Date:
Client:
Year end:
PRELIMINARY ANALYTICAL PROCEDURE
Comments
1. Consider comparison of the draft results for the current period with:
(b) those anticipated in budgets or forecasts;
(c) the auditor’s expectation; and
(d) other companies of comparable size in the same industry.
(e) prior period ratios developed from recorded amounts.
2. Consider relationships between:
(a) elements of financial information that would be expected to conform to
a predictable pattern based on the company's experience, such as gross
margin percentages; and
(b) financial information and relevant non-financial information, such as

payroll costs to number of employees; sales and square footage of selling
space or volume of goods sold.
3. Consider the reliability of the information used to perform analytical review

procedures and whether this will be verified as part of the audit process.
4. Consider whether any expectations or comparisons used are sufficiently

precise to identify potential misstatements.
5. Consider whether there are any indicators that the client might be involved
in money laundering or other criminal activities.
6. Summarise specific risks affecting the entity arising from above risk
assessment to C8.1/C8.2.
PRELIMINARY EVALUATION OF GOING CONCERN RISK

The following are examples of events or conditions that, individually or collectively, may cast significant doubt about the going con
assumption. This listing is not all-inclusive nor does the existence of one or more of the items always signify that a material uncert
Events or Conditions That May Cast Doubt about Going Concern

Yes No N/A
Assumption
Financial
· Net liability or net current liability position.
· Fixed-term borrowings approaching maturity without realistic
prospects of renewal or repayment; or excessive reliance on short-term
borrowings to finance long-term assets.
· Indications of withdrawal of financial support by creditors.
· Negative operating cash flows indicated by historical or prospective
· Adverse key financial ratios.
· Substantial operating losses or significant deterioration in the value
of assets used to generate cash flows.
· Arrears or discontinuance of dividends.
· Inability to pay creditors on due dates.
· Inability to comply with the terms of loan agreements.
· Change from credit to cash-on-delivery transactions with suppliers.
· Inability to obtain financing for essential new product development

or other essential investments.
· Necessary borrowing facilities have not been agreed.
· Major debt repayment falling due where refinancing is necessary to
the entity’s continued existence.
· Major restructuring of debt.
· Reduction in normal terms of trade credit by suppliers.
Operating
· Management intentions to liquidate the entity or to cease
operations.
· Loss of key management without replacement.
· Loss of a major market, key customer(s), franchise, license, or
principal supplier(s).
· Labour difficulties.
· Shortages of important supplies.
· Emergence of a highly successful competitor.
· Loss of key staff without replacement.
· Fundamental changes in the market or technology to which the
entity is unable to adapt adequately.
· Excessive dependence on a few product lines where the market is
depressed.
· Technical developments which render a key product obsolete.
Other
· Non-compliance with capital or other statutory requirements.
· Pending legal or regulatory proceedings against the entity that may,
if successful, result in claims that the entity is unlikely to be able to
satisfy.
· Changes in law or regulation or government policy expected to
adversely affect the entity.
· Uninsured or underinsured catastrophes when they occur.
· Issues which involve a range of possible outcomes so wide that an
unfavourable result could affect the appropriateness of the going
concern basis.
Based on preliminary analytical procedures documented in C6 series and above risk assessment procedure, consider whether the
indications that the going concern basis of accounting may not be appropriate.
Initial (Planning)
Date: Date:
Final update
Date: Date:
Ref
C6
ments WP Ref
t doubt about the going concern

ignify that a material uncertainty exists.
Comments
edure, consider whether there are any
Client:
Year end:
Guidance Template – PRELIMINARY ANALYTICAL procedure

Consider using the following template to carry out analytical procedures based on the preliminary figures or other information
movements in the account balances. For trend analysis, the auditor would ordinarily require more than two years of informatio
CY % change
Balance sheet Ref
(Draft) from PY1
Current assets
Cash and bank balances A
Trade receivables B
Other receivables C
Inventories D
Investments E1
Total current assets F
Non-current assets
Investments E2
Property, plant and equipment G
Investment property H
Total non-current assets I
Total assets J
Current liabilities
Trade payables K
Other payables L
Loans and borrowings M1
Income tax N
Total current liabilities O
Non-current liabilities
Loans and borrowings M2
Total non-current liabilities P
Total liabilities Q
Net assets R
Equity
Share capital S
Retained earnings T
Total equity U
CY % change
Profit or loss Ref
(Draft) from PY1
Revenue AA
i. Credit sales AA1
ii. Cash sales AA2
*Cost of goods sold AB
Gross profit AC
*Marketing expense AD
*Distribution expense AE
*Administrative expense AF
*Financing costs AG
*Other expense AH
*Other income AI
Profit before tax AJ
*Tax expense AK
Profit after tax AL
Generally, the effectiveness of analytical procedures increases when the analysis is performed based on disaggregated, rath
engagement should consider obtaining further disaggregated information, such as breakdown of information per the notes to
consider obtaining relevant non-financial information) to better evaluate the relationship of the financial information.
* Consider performing analysis based on the detailed profit or loss information
Ratio (including but not limited CY % change

Formula
to) (Draft) from PY1
Debtors turnover [Credit

sales/Average Trade AA1 ÷ Average B
receivables]
365 days ÷
Debtors turnover days
Debtors turnover
Average credit terms to

-
debtors
Creditor turnover
[Purchases/Average Trade AB÷ Average K
payables]
Average credit terms from
-
creditors
Inventory turnover
AB÷ Average D
[COGS/Average Inventories]
Current ratio [Current

F÷N
assets/Current liabilities : 1]
Quick ratio (F-D)÷O
Gearing ratio [Total debt/total
(M1+M2) ÷U
equity]
Gross profit margin (%) AC÷AA
Net profit margin (%) AL÷AA
Ratio Analysis
Ratio What it means
The number of times that the accounts receivables get turned over per year. The higher the am
Debtors turnover
better than 0.5).
The average number of days that the company took to collect the average amount of accounts
Debtors turnover days (Day’s
turnover days indicates better collectability (i.e. 30 days is better than 90 days). This is usuall
Sales in Accounts Receivable)
customers.
Creditors turnover The number of times that the accounts payable get turned over per year. The lower the amoun
Inventory turnover The number of times that the inventories get turned over per year. The higher the amount indi
Indicates the relationship between current assets (CA) to current liabilities (CL). The higher th
Current ratio
better than 2:1).
Similar to current ratio, except that inventories, supplies and prepaid expenses are excluded.
Quick ratio (Acid test ratio)
assets that can be quickly converted into cash versus the amount of current liabilities. The hig
The proportion of the company’s assets supplied by the company’s creditors versus the amou
Gearing ratio (Debt to equity)
higher ratio (i.e. more than 50%) indicates a greater risk. A low-geared company indicates bet
The higher the margin, the more profitable the company. Margins will vary between industries
Gross profit margin
significantly from prior periods.
Indicates the profit per sales dollar. The higher the margin, the more profitable the company. M
Net profit margin
is not expected to fluctuate significantly from prior periods.
Identify significant movements/fluctuations that are unusual or not consistent with our understanding or expectation of the res
management explanation and identify areas where we would perform audit procedures to corroborate those explanation. Sum
t/m Analysis/Comments
(a) General (applicable to all accounts)

Consider the following questions when describing the nature and analysis of the account bala
represent specific risks.
Risk considerations, including but not limited to:
1. Were there any corrected or uncorrected misstatements in prior period? (B7)
2. Were there any disclosure deficiencies in prior period?
3. Was the assessed risk during the prior period for the account classified as Medium or Hig
4. Are there any changes in accounting policies during the period?
5. Is the account balance significant (amount > PM) or expected to be significant at the end
6. Can extensive analytical procedures be used to improve the efficiency and effectiveness o
7. Are there any non-compliances with FRSs in prior periods?
(b) Cash and bank balances
1. Are there any banking facilities other than the current account?
2. Are there significant cash transactions?
3. Is there a significant number of bank accounts?
4. Are there any overseas bank accounts/facilities?
5. Is there a significant amount of transactions for all bank accounts?
6. Are there significant balances denominated in foreign currencies?
7. Are there any fixed deposits with original maturity of more than 3 months?
8. Are there any pledged deposits?
9. Are monthly bank reconciliations prepared by the entity?
(c) Trade, bills and other receivables
1. Are there significant related party balances?
2. Is there any concentration of debts from a particular individual entity or group of entities?
3. Are there significant overdue balances?
4. Are there any factoring of receivables and/or discounting of bills receivable?
5. Is the allowance for impairment of trade and other receivables excessive or inadequate ba
6. Are there any advances or lump sum payments collected from its customers?
7. Are sales returns expected to be material?
8. Are there any interest-bearing or interest-free loans granted to related parties or third part
9. Are there significant prepayments and deposits?
10. Is there no systematic and verifiable basis by the management for assessing allowance fo
(d) Inventories
1. Is the management unable to perform a full physical inventory count?
2. Is inventory count conducted at periods other than at period end?
3. Is the auditor unable to attend and observe the physical inventory count?
4. Are there significant inventories on consignment?
5. Are there significant inventories held by third parties?
6. Is the auditor unable to obtain confirmation from third parties on inventories on consignme
7. Are there any purchases of inventory denominated in foreign currencies?
8. Is the allowance for inventories obsolescence material or expected to be material?
9. Is the allowance for inventories obsolescence excessive or inadequate based on prior exp
10. Is there no systematic and verifiable basis by the management for assessing the amount
11. Are the costs of the inventories determined other than by supplier invoices?
12. Are the costs of the inventories at the end of the reporting period determined by manual c
13. Are there different types of inventories accounted for using different methods?
14. Are the actual physical inventory flows similar to the cost flow methods used?
15. Are the inventories pledged for loans granted to the entity?
(e) Property, plant and equipment
1. Are there significant additions and/or disposals during the period?
2. Are there foreign currency denominated additions or disposals during the period?
3. Are there property, plant and equipment pledged to banks and/or other parties?
4. Are there property, plant and equipment not in use/idle/damaged?
5. Are there significant fully depreciated assets still in use by the entity?
6. Are the useful lives excessive or inadequate based on prior experience?
7. Is the auditor unable to obtain external confirmations for property, plant and equipment he
8. Are there any property, plant and equipment held outside the country?
9. Are there any leasehold land and building that require separate classification of lease?
10. Is the revaluation model applied on certain classes of the assets?
11. Where the work of an expert is to be relied on for the following:
· the valuation of assets & liabilities;
· the determination of quantities;
· the application of specialised techniques to determine amounts; or
· the measurement of work completed,
the auditor is to complete one or both of the following supplementary programmes:
(i) Using the Work of Management's Expert (App8)
(ii) Using the Work of an Auditor's Expert (App9)
12. Are there asset-related government grants received during the period?
13. Are there any exchanges of assets during the period?
14. Are there any indications that assets may be impaired based on our understanding of the
(f) Investment property

1. Are there additions to investment properties during the period?
2. Are there additions or disposals denominated in foreign currencies during the period?
3. Are there investment properties pledged to banks and/or other parties?
4. Is fair value model used to measure the investment properties?
5. Where the work of an expert is to be relied on for the following:
· valuation of assets and liabilities;
· determination of quantities;
· application of specialised techniques to determine amounts; or
· measurement of work completed,
the auditor is to complete one or both of the following supplementary programmes:
6. Are the investment properties used for long-term capital appreciation and/or leased out un
7. Are there disposals or transfers to/from investment properties during the period?
8. Are the useful lives excessive or inadequate based on prior experience?
9. Are there indications that the investment properties may be impaired?
(g) Equity investments
1. Are the investments wholly-owned?
2. Are the investee’s financial records not accessible by the client?
4. Are there any transactions resulting in adjustments to equity investments during the period
5. Are there any business combinations during the period?
6. Are there any investments pledged to banks and/or other parties?
7. Any there any indications that the investments are impaired?
8. Is the allowance for impairment of the investments excessive or inadequate based on prio
9. Is there no systematic and verifiable basis by the management for assessing allowance fo
10. Are there any significant inter-company balances/loans?

11. Are there any investments made in foreign currencies?
(h) Trade, bills and other payables
1. Are there significant related party balances?
2. Are there any interest-bearing or interest-free loans obtained from related parties or third p
3. Are there significant overdue balances?
4. Are payables likely to be understated due to client’s improper or inadequate cut-off of proc
5. Are client’s estimating procedures generally not reliable based on prior experience?
6. Is there no systematic and verifiable basis by the management for deriving accounting est
7. Are there deferred income arising from government grants received?
8. Are there material bills payable and other payables?
(i) Borrowings and finance leases
1. Are there any credit facilities including but are not limited to loans, letter of credit, etc. gran
2. Are the borrowings secured by way of pledge of the entity’s assets?
3. Are there significant movements in borrowings during the period?
4. Are there any purchases which are settled by way of issuing bills payables?
5. Are there any indications that bills payable issued by the entity are not supported by unde
6. Are there any finance lease transactions entered with banks or other financial institutions?
(j) Current and deferred income taxes
1. Are there significant matters currently outstanding with the tax authorities?
2. Are there significant overseas taxes?
3. Are there significant foreign-sourced income not remitted to Singapore?
4. Is the entity entitled to any corporate tax relief scheme with conditions attached to it?
5. Are there temporary differences that give rise to deferred tax?
6. Are there significant property, plant and equipment which the entity has claimed capital al
7. Are there any indications that the deferred tax assets recognised by the entity may not be
(k) Share capital
1. Are there any dividends proposed, declared or paid out during the current period?
2. Is there any movement in share capital?
3. Are there significant transactions resulting in adjustments to equity items during the period
4. Is there any change to the ultimate controlling party?
5. Are there any capital contributions made in foreign currencies?
(l) Reserves
1. Is there any reserve created during the current period other than retained earnings?
2. Is there any movement in reserve other than retained earnings?
3. Is there any significant transaction resulting in adjustment to reserve items during the peri
4. Is there any capital contribution that is recorded as part of retained earnings?
5. Is there any change in the nature of the reserve items?
(m) Profit or Loss - Revenue and Cost of Sales
1. Are there significant related party transactions?
2. Are there different types of revenue with different revenue recognition policies?
3. Are there any arrangements with multiple performance obligations?
4. Are significant estimates and judgement required in revenue recognition?
5. Is there no detailed revenue cut-off evaluation performed by the management at the perio
6. Is there sufficient reliable information available for auditor to develop an expectation of the
revenue amount?
7. Are there significant cash transactions?
8. Are significant cut-off errors expected to occur at the end of the reporting period?
9. Are sales returns expected to be material?
10. Is there cost of sales reconciliation and gross profit margin analysis prepared by the clien
11. Are payables likely to be understated due to lack of or insufficient management’s cut-off p
(n) Profit or Loss – Operating expenses and others
1. Are the fluctuations of operating expenses consistent with the business development durin
2. Are wages and salaries material in relation to the total operating expenses?
3. Is the entity paying any emoluments to directors?
4. Are other income/expenses such as gain or loss from disposal of property, plant and equi
5. Are there share-based payment transactions?

6. Is there a defined benefit plan?
(o) Related party transactions and disclosures
1. Are there any significant related party transactions entered into by the entity during the cu
2. Are there controls in place to properly identify, compile and update the related parties listin
3. Are there controls to ensure significant related party transactions are authorised by person
charged with governance?
4. Are there any loan accounts with directors or shareholders?
5. Are the existing suppliers or customers appear to be related parties?
6. Are terms with existing suppliers or customers appear abnormal?
7. Are there transactions with related parties in which substance differs from form?
8. Are there indications of fraud from the transactions with the related parties?
9. Are there transactions with related parties that appear to be outside the normal course of
(p) Provisions, Contingent Liabilities and Commitments
1. Is the entity required to provide warranties or after sales services to its customers?
2. Are there any on-going or potential litigations and claims?
3. Are there any contracts that the entity has committed to enter into to purchase property, p
equity investments at the end of the reporting period?
4. Are there any non-cancellable operating lease contracts entered into by the entity?
5. Are there any significant provisions denominated in foreign currencies?
Initial (Planning)
Prepared by:
Date:
Guidance Template – Indicators of suspicious transactions
Money launderers use many different and sophisticated types of schemes, techniques and transactions to accomplish their e
money laundering methodologies, the following are the more frequently observed signs of suspicions:
Yes
1. Frequently observed signs of suspicions:
a. Broadly, transactions that appear inconsistent with a client's known

legitimate (business or personal) activities or means; unusual deviations from
normal account and transaction;
The following sets out examples of common indicators of suspicious transactions. Indicators to help establish that a transactio
those relating to money laundering. While each individual indicator may not be sufficient to suggest that suspicious transactio
situations may be indicative of a suspicious transaction. The list is intended as a guide and shall not be applied as a routine c
Yes
2. Common indicators of suspicious transactions.
a. General
· Client repeatedly uses an address but frequently changes the names
involved.
· Client is accompanied and watched.
· Client shows uncommon curiosity about internal systems, controls, policies
and reporting; client has unusual knowledge of the law in relation to
suspicious transaction reporting.
· Unusual nervousness of the person conducting the transaction.
· Client appears to have recently established a series of new relationships

with different financial entities.
· Client’s lack of business knowledge atypical of trade practitioners.

· Forming companies or trusts with no apparent business purpose.
b. Transactions Involving Accounts

· Use of nominees who act as holders of, or who hold power of attorney
over, bank accounts.
· Establishment of multiple accounts, some of which appear to remain
dormant for extended periods.
· Account that was reactivated from inactive or dormant status suddenly
sees significant activity.
c. Transactions Related to Offshore Business Activity
· Loans secured by obligations from offshore banks.
· Loans to or from offshore companies.
· Offers of multimillion-dollar deposits from a confidential source to be sent
from an offshore bank or somehow guaranteed by an offshore bank.
d. Accountants
· Client has a history of changing bookkeepers or accountants yearly.
· Company records consistently reflect sales at less than cost, thus putting
the company into a loss position, but the company continues without
reasonable explanation of the continued loss.
e. Tax Practitioners

· Client obtains loan from unidentified parties
f. Factors arising from action by the entity or its directors
· Complex or unusual transactions, possibly with related parties.
· The forming of companies or trusts with no apparent commercial or other

purpose.
Ref:
C6GT
the preliminary figures or other information available. Identify and investigate any significant
ily require more than two years of information for proper analysis.
% change t/m
PY1 (Audited) PY2 (Audited)
from PY2 {a}
{b}
{c}
{c}
{d}
{g}
{g}
{e}
{f}
{h}
{h}
{i}
{j}
{i}
{k}
{l}
% change t/m
PY1 (Audited) PY2 (Audited)
from PY2 {a}
{m}
{m}
{n}
{n}
{n}
{i}
{n}
{n}
{j}
is performed based on disaggregated, rather than aggregated, information. The

s breakdown of information per the notes to the financial statements disclosures (and also
onship of the financial information.
% change
PY1 (Audited) PY2 (Audited) t/m
from PY2
What it means
s get turned over per year. The higher the amount indicates better collectability (i.e. 5 is
ok to collect the average amount of accounts receivable during the year. The shorter the
days is better than 90 days). This is usually analysed with the credit terms extended to
et turned over per year. The lower the amount indicates slow/delayed repayments.
d over per year. The higher the amount indicates faster sales (i.e. 12 is better than 6).
(CA) to current liabilities (CL). The higher the ratio of CA:CL, the better it is (i.e. ratio of 4:1 is
pplies and prepaid expenses are excluded. Indicates the relationship between the amount of
sus the amount of current liabilities. The higher the ratio, the more liquid the company is.
by the company’s creditors versus the amount supplied by the shareholders. Company with
er risk. A low-geared company indicates better financial stability.
mpany. Margins will vary between industries, however, it is not expected to fluctuate
margin, the more profitable the company. Margins will vary between industries, however, it
periods.
our understanding or expectation of the results and financial position of the entity. Document
dures to corroborate those explanation. Summarise any risk identified here in C8.1/C8.2.
Analysis/Comments
the nature and analysis of the account balance and, where applicable, determine if these
tatements in prior period? (B7)

r period?
for the account classified as Medium or High?
during the period?
PM) or expected to be significant at the end of the reporting period?
to improve the efficiency and effectiveness of the audit?

prior periods?
current account?
s?
es?
or all bank accounts?
foreign currencies?
urity of more than 3 months?
the entity?
ticular individual entity or group of entities?
discounting of bills receivable?
ther receivables excessive or inadequate based on prior experience?
ts collected from its customers?
loans granted to related parties or third parties?

s?
the management for assessing allowance for impairment?
n foreign currencies?
hysical inventory count?

than at period end?
e physical inventory count?
ent?
parties?
m third parties on inventories on consignment?
nated in foreign currencies?
material or expected to be material?
excessive or inadequate based on prior experience?
the management for assessing the amount of allowance for inventories obsolescence?
her than by supplier invoices?

he reporting period determined by manual calculations?
nted for using different methods?
to the cost flow methods used?
to the entity?
s during the period?

ons or disposals during the period?
ged to banks and/or other parties?
n use/idle/damaged?
till in use by the entity?
ased on prior experience?
mations for property, plant and equipment held by third parties?
held outside the country?

require separate classification of lease?
asses of the assets?
for the following:
s to determine amounts; or
ing supplementary programmes:

pp8)
p9)
ceived during the period?
period?
mpaired based on our understanding of the entity’s business environment?
uring the period?

in foreign currencies during the period?
nks and/or other parties?
tment properties?
for the following:
etermine amounts; or
ing supplementary programmes:

App8)
p9)
rm capital appreciation and/or leased out under operating lease?
ment properties during the period?

ased on prior experience?
erties may be impaired?
sible by the client?

ments to equity investments during the period?
he period?
nd/or other parties?
s are impaired?
ents excessive or inadequate based on prior experience?
the management for assessing allowance for impairment?
ces/loans?
rrencies?
loans obtained from related parties or third parties?
lient’s improper or inadequate cut-off of procedures?

ot reliable based on prior experience?
the management for deriving accounting estimates?
nment grants received?
ables?
foreign currencies?
not limited to loans, letter of credit, etc. granted to the entity?

of the entity’s assets?
way of issuing bills payables?
ued by the entity are not supported by underlying transactions?
red with banks or other financial institutions?

foreign currencies?
ding with the tax authorities?
not remitted to Singapore?

scheme with conditions attached to it?
to deferred tax?
ment which the entity has claimed capital allowances but are not fully depreciated?
assets recognised by the entity may not be realised?
r paid out during the current period?
adjustments to equity items during the period?

party?
reign currencies?
t period other than retained earnings?

etained earnings?
adjustment to reserve items during the period?
ed as part of retained earnings?
ve items?
?
ent revenue recognition policies?
ormance obligations?
red in revenue recognition?
performed by the management at the period end?
e for auditor to develop an expectation of the revenue amount and compare to the recorded
r at the end of the reporting period?
profit margin analysis prepared by the client?

ack of or insufficient management’s cut-off procedures?
s
nsistent with the business development during the period?

the total operating expenses?
rs?
ss from disposal of property, plant and equipment expected to be significant?
tions entered into by the entity during the current period?

compile and update the related parties listing?
d party transactions are authorised by personnel with appropriate level of authority or those
shareholders?
r to be related parties?
s appear abnormal?
which substance differs from form?
tions with the related parties?
t appear to be outside the normal course of entity’s business?

ments
after sales services to its customers?

and claims?
mmitted to enter into to purchase property, plant and equipment, investment properties or
od?
e contracts entered into by the entity?
ted in foreign currencies?
Reviewed by:
Date:
ns
ques and transactions to accomplish their ends. While it would be difficult to describe all
signs of suspicions:
No N/A Comments WP ref
Indicators to help establish that a transaction is related to terrorist financing mostly resemble
fficient to suggest that suspicious transaction is taking place, a combination of such
guide and shall not be applied as a routine checklist in place of common sense.
No N/A Comments WP ref

Client: Ref:
Year end: C7
NOTES OF MEETING – SUMMARY CONTROL LIST
The engagement team would have meetings during the course of the audit. This summary control list provides an
overview of the meetings held and can also be used for scheduling of meetings with proposed meeting dates inserted
in [brackets].
1. Meetings held with those charged with governance and/or management (C7.1 series)
Meeting Dates
No. Brief agenda Meeting minute ref
[Proposed]
1. Planning and fraud discussion C7.1
2. Completion A7
2. Meetings held with engagement team (C7.2 series)

Meeting Dates
No. Brief agenda Meeting minute ref
[Proposed]
1. Engagement team fraud discussion C7.2
2.
3. SUMMARISE SPECIFIC RISKS AFFECTING THE ENTITY ARISING FROM ABOVE MEETINGS TO
C8.1/C8.2
Initial (Planning)
Date: Date:
Final update
Date: Date:
Client: Ref:
Year end: C7.1
NOTES OF PLANNING MEETING WITH MANAGEMENT / THOSE CHARGED WITH

GOVERNANCE

Location:
Name Designation
Partner
A. Suggested agenda topics for discussion with management / those charged with governance (including,
but may not be limited to)
Agenda Minutes of meeting
1. Obtain updates on operations, industry, financial
condition, management, finance team, regulatory
compliance, accounting policies used, going concern etc
(e.g. Use the information in C4, C5, C6 series to guide
the discussion)
2. Discuss FRSs changes that will affect the entity in the
current and future financial year.
> Obtain understanding of management’s
assessment of the possible effect of such
changes on their financial statements and their
planned response to the changes in financial
reporting standards. Assess management’s
response to ascertain adequacy, appropriateness
and whether if there is a risk of material
misstatements on the financial statements.
3. Discuss SSAs changes that will affect the audit.
> Obtain management’s acknowledgement of their
responsibility to prepare true and fair financial
statements in accordance with the requirements
of the Companies Act and Financial Reporting
Standards and also their acknowledgement to
provide the auditor with sufficient and appropriate
audit evidence necessary to form our opinion.
Client: Ref:
Year end: C7.1
4. Discuss Companies Act and other relevant regulatory

changes that affect the entity.
> Obtain understanding of management’s
assessment of the possible effect of such
changes on their operations, their planned
response to the changes in regulations, and
assess their response to ascertain if there is a
risk of material misstatements on the financial
statements.
5. Compliance with Laws and Regulations
> Inquiring of management and, where appropriate,
those charged with governance, as to whether
the entity is in compliance with laws and
regulations that have a direct effect on the
determination of material amounts and
disclosures in the financial statements.
> The responsibility for the prevention and
detection of money laundering and terrorist
financing activities rests with management
through the implementation and continued
operation of adequate accounting and internal
control systems.
> Any non-compliance with the anti-money
laundering and countering the financing of
terrorism legislation?
6. Susceptibility of the financial statements to fraud and
error
> How is management’s assessment of the risk
that the financial statements may be materially
misstated due to fraud, including the nature,
extent and frequency of such assessments?
> What is management’s process for identifying
and responding to the risks of fraud in the entity,
including any specific risks of fraud that
management has identified or that have been
brought to its attention, or classes of
transactions, account balances, or disclosures for
which a risk of fraud is likely to exist?
> How does management communicate to those
charged with governance regarding its processes
for identifying and responding to the risks of fraud
in the entity?
> How does management communicate to
employees regarding its views on business
practices and ethical behavior?
> Does management have knowledge of any
actual, suspected or alleged fraud affecting the
entity?
Client: Ref:
Year end: C7.1
7. Presentation of audit plan

> Overview of the planned scope and timing of the
audit.
> How does the auditor propose to address the
significant risks of material misstatement,
whether due to fraud or error?
> What is the auditor’s approach to internal control
relevant to the audit?
> What is the application of the concept of
materiality in the context of an audit?
8. Discuss with those charged with governance on the
following matters:
> The appropriate person(s) in the entity’s
governance structure with whom to
communicate;
> The allocation of responsibilities between those
charged with governance and management;

> The entity’s objectives and strategies, and the
related business risks that may result in material
misstatements;
> Matters that warrant particular attention during
the audit, and any areas where they request
additional procedures to be undertaken;
> Any significant communications with regulators;
> Other matters that may influence the audit of the

financial statements;
> The attitudes, awareness, and actions
concerning (a) the entity’s internal control and its
importance in the entity, including how those
charged with governance oversee the
effectiveness of internal control, and (b) the
detection or possibility of fraud;
> The actions response to developments in
accounting standards, corporate governance
practices, exchange listing rules, and related
matters; and
> Responses to previous communications with the
auditor.
9. Other matters
DOCUMENT ANY RISK IDENTIFIED ARISING FROM THE ABOVE DISCUSSION HERE (TRANSFER RISK
IDENTIFIED HERE TO C8.1/C8.2)
Affects FS level Affects Assertion level
Risks identified
C8.1 C8.2 Accounts affected
Date: Date:
Client: Ref:
Year end: C7.2
NOTES OF PLANNING MEETING WITH ENGAGEMENT TEAM

Location:
Name Designation
Partner
Manager
Senior
Associate
A. SUGGESTED AGENDA FOR DISCUSSION AMONG THE ENGAGEMENT TEAM (including, but may not be
limited to)
AGENDA MINUTES OF MEETING
1. Highlight key areas and updates on operations, industry,
financial condition management, finance team,
regulatory compliance, accounting policies used, going
concern etc.
E.g. Share insights on the entity such as people,
operations and objectives by using the information in C4,
C5, C6 series to guide the discussion.
2. Highlight common observations regarding FRSs, SSAs,
Companies Act and other relevant regulatory
requirements and key changes that will affect the entity
in the current and future financial year.
> Identify areas which engagement team members
should place greater emphasis and/or exercise
higher professional scepticism.
> Remind engagement team members to perform
and document audit procedures according to
standard requirements and look out for instances
of non-compliance with regulations.
> Remind engagement team members to identify
significant transactions that are outside the
ordinary course of business for the entity, or that
otherwise appear to be unusual given the
auditor's understanding of the entity and its
environment and other information obtained
during the audit, evaluate whether the business
rationale (or the lack thereof) of the transactions
suggests that they may have been entered into to
engage in fraudulent financial reporting or to
conceal misappropriation of assets.
Client: Ref:
Year end: C7.2
AGENDA MINUTES OF MEETING

3. Susceptibility of the financial statements to fraud and
error, e.g.
> How and where the financial statements might be
susceptible to material misstatement due to fraud
or error?
> How could potential fraud occur?
> Develop possible scenarios and plan procedures
to confirm or dispel any suspicions.

4. Provide directions to audit team on:
> Materiality level;
> Significant risks and audit responses to the risks
identified;
> Assign roles and responsibilities;
> Provide staff with an overview of the audit
sections they are responsible for completing;
> Address the approach required, special
considerations, timing, documentation required,
extent of supervision provided, file review and
any other expectations;
> Emphasise the importance of maintaining
professional scepticism throughout the audit.
5. Other matters
> Consider need for specialised skills, and
consultants.
> Others:
B. MATTERS TO BE COMMUNICATED TO OTHER MEMBERS ON THE ENGAGEMENT TEAM NOT

INVOLVED IN THE DISCUSSION
Name Engagement Role Subject Date subject has
been communicated
DOCUMENT ANY RISK IDENTIFIED ARISING FROM THE ABOVE DISCUSSION HERE (TRANSFER RISK
IDENTIFIED HERE TO C8.1/C8.2)
Affects FS level Affects Assertion level
Risks identified
C8.1 C8.2 Accounts affected

Date: Date:
Client: Ref:
Year end: C8
RISK ASSESSMENT SUMMARY
A. FINANCIAL STATEMENTS LEVEL RISK (C8.1)
Overall classification of risk at financial statements level is:
Low Medium High
B. SPECIFIC ASSERTION LEVEL RISK (C8.2)
Risk of Material
Financial
Assertion Misstatements
WP Ref Description of Risk Identified statements
affected (RMM)
account affected
classification
Initial (Planning)
Prepared by: Reviewed by
Date: Date:
Final update
Prepared by: Reviewed by
Date: Date:
Client: Ref:
Year end: C8.1
FINANCIAL STATEMENT LEVEL RISK ASSESSMENT
Risk of Material Misstatements

Inherent risk assessment and classification (C4/C6/C7) Control risk classification (C5)
classification
WP Ref Risk description L/M/H* WP ref L/M/H* L/M/H*
Key: L = Low risk; M = Medium risk; H = High risk
Conclusion: Overall financial statement level risk classification is Low / Medium / High.
Initial (Planning)
Date: Date:
Final update
Date: Date:
Client: Ref:
Year end: C8.2
SPECIFIC ASSERTION LEVEL RISK ASSESSMENT
Risk of Material
Control risk
Inherent risk assessment and classification (C4/C6/C7) Misstatements
classification (C5)
classification
Financial statements Assertions

WP Ref Risk description L/M/H* WP ref L/M/H* (L / M / H *)
accounts affected affected
Initial (Planning)
Date: Date:
Final update
Date: Date:
Client: Ref:
Year end: C9
RISK RESPONSE SUMMARY
A. FINANCIAL STATEMENTS LEVEL RISK
RMM
WP Ref Risk classification Proposed risk response Outcome
(L/M/H*)
B. SPECIFIC ASSERTION LEVEL RISK

Proposed risk response
RMM Description of nature, timing
Financial statements Assertion
WP Ref Risk* classification WP Ref and extent of audit procedures Outcome
account affected affected
(L/M/H*) relevant to address risk

* Where risks identified include areas of judgement or estimates, refer to D3 for response.
Client: Ref:
Year end: C9
C. TEST OF OPERATING EFFECTIVENESS OF RELEVANT INTERNAL CONTROLS
Yes / No WP Ref
1. Does the proposed risk assessment above include reliance on the internal
controls (C8.1/C8.2)? If no, proceed to paragraph D below.
2. Have the engagement team evaluated the operating effectiveness of controls
in preventing, or detecting and correcting, material misstatements at the
assertion level (C9.1)?
3. Based on work performed, is the engagement team satisfied that the controls
are effective? Where controls are not effective, re-evaluate the audit strategy
and/or response.
D. DETERMINING OVERALL PERFORMANCE MATERIALITY
The overall performance materiality is computed as follows:
Amount
1. Selected overall materiality ($) (from C3)
2. Overall financial statements level risk classification (from C8) L/M/H
3. Assertion level risk L
4. Sampling risk factor based on overall financial statements level risk classificatio 1.2 / 1.4 / 1.6
5. Calculated overall performance materiality ($)

Key: L = Low risk; M = Medium risk; H = High risk.
The performance materiality for specific section and assertion (other than “L”) would vary depending on the risk response determined above and should be separately
calculated in the respective sections.
Client: Ref:
Year end: C9
E. PLANNING CONCLUSION
I am satisfied that based on the proposed audit response planned as above and at each of the respective sections, sufficient appropriate evidence can be obtained to
satisfy the overall audit objectives.
Date: Date:
F. FINAL UPDATE
Date: Date:
Client:
Year end:
Guidance Template – Risk response summary

Sample Size planning
Substantive Test of operating

analytical effectiveness of
Section procedures to be internal controls
applied? to be performed?
(Y/N) (Y/N)
E Cash and bank balances
F Trade, bills and other receivables
G Inventory
H
I Property, plant and equipment
J Investment property
K Equity investments
L
M
N Trade, bills and other payables
O Borrowings and finance lease
P Current and deferred income tax
Q
R Share capital and reserves
S Profit or loss – Revenue and cost of sales
T Profit or loss – Operating expenses and Others
U Related party transactions and disclosures
V Subsequent events and going concern evaluation
W
X Provisions, contingent liabilities and financial commitments
Y
Z
Ref:
C9GT
Internal Sufficient
Substantive
control work
procedure
sample performed?
sample size
size (Y/N)
Client: Ref:
Year end: C9.1
TEST OF OPERATING EFFECTIVENESS OF RELEVANT INTERNAL CONTROLS
Objective
To evaluate the operating effectiveness of controls in preventing, detecting and correcting material misstatements at the
assertion level.
Description of the
Description of the procedures performed to Reference to
Results satisfactory
WP ref (C5) design of relevant test operating detailed work
(Yes/No)
controls (C5.1) effectiveness of the (WP ref)
relevant controls (C5.2)
Conclusion
Based on the work done, the engagement team is satisfied that the internal controls are operating effectively.
Date: Date:
Client: Ref:
Year end: D
D GENERAL AUDIT PROCEDURES

1 Audit programme – General ledger
1.1
Auditor’s assessment of appropriateness of functional currency
1.2 Management’s assessment of functional currency

1.3 Evaluate the use of foreign currency exchange rates
2.1 Test of opening general ledger balances (Initial engagement)
2.2
Test of opening general ledger balances (Recurring engagement)
3 Test for management override of controls

4 Test of closing general ledger balances
5 Audit programme – Statutory records and review of minutes
5.1 Audit of statutory records
5.2 Review of minutes of meeting / resolutions
Client: Ref:
Year end: D1
AUDIT PROGRAMME - GENERAL LEDGER
SUMMARY SHEET
I. AUDIT OBJECTIVES
Steps
1. To establish the appropriateness of the entity’s functional currency. A
2. To establish the foreign currency exchange rates used for recording of foreign currency
B
transactions and translation of monetary balances are reasonable.
3. To establish the opening balance in the general ledger is accurately carried forward from
C
the prior period.
4. To establish the journal entries passed and transactions recorded during the year are
D
reasonable and not unusual.
5. To establish the closing balance in the general ledger is accurately carried forward to the
E
II. AUDIT PROCEDURE DESIGN CONSIDERATIONS

Yes No Comments
For risk identified in C8, perform the audit procedure per
C9.
1. Step A – Assessment of appropriateness of functional

currency
- Is the presentation currency different from the functional currency determined by the management?
- Is there any change in the percentage of foreign currency revenue or purchases during the year?
- Is there any change in the foreign customers or suppliers during the year?
- Is the currency in which funds from financing activities are generated and/or receipts from operating
activities are retained different from its functional currency?
2. Step B – Test of foreign currency exchange rates used

- Are there significant foreign currency transactions during the year?
- Does the entity maintain a list of the foreign currency exchange rates used for recording and translating its
foreign currency transactions and monetary balances?
- Does the entity use market-sourced foreign currency exchange rates for recording and translating its foreign
currency transactions and monetary balances?
- Is the market-sourced foreign currency exchange rates used for recording and translating its foreign currency
transactions and monetary balances consistently applied?
3. Step C – Test of opening general ledger balances

- Is this an initial engagement?
- Is there a transfer of the balances into a new general ledger or change in accounting system at the beginning,
during the year or end of the year?
- Is there a change in accounting policy or did the entity adopt a new accounting policy during the year?
4. Step D – Review of journal entries and unusual transactions
- Is there proper segregation of duty in the preparation and processing of journal entries?
- Is a sub-ledger being used to record and process transactions?
- Are journal entries being processed at the sub-ledger?
- Are there many reversal entries passed subsequent to period end?
5. Step E – Test of closing general ledger balances

- Does the entity generate a set of management accounts that is similar to the final financial statements?
- Does the entity require many reclassification and/or adjusting entries to reconcile the management accounts to
the final financial statements?
Client: Ref:
Year end: D1
III. PLANNING CONCLUSION

I am satisfied from the planned tests, sufficient appropriate evidence can be obtained to meet the audit
objectives.
Date: Date:
Client: Ref:
Year end: D1
Results
WP ref satisfactory Initials and date
Y/N
A. Assessment of appropriateness of functional
currency
1. Obtain and review management’s assessment of D1.2
the functional currency to evaluate whether
management has appropriately assessed and
determined the functional currency of the entity
in accordance with the requirements in FRS 21 -
The Effects of Changes in Foreign Exchange
Rates.
2. Perform relevant audit procedures to obtain D1.1
evidence that management’s assessment
reflects the underlying transactions, events and
conditions that are relevant to it.
B. Test of foreign currency exchange rates used
1. Assess the appropriateness of the foreign D1.3

exchange rates used by the entity to record
foreign currency transactions during the year
and translation of monetary balances at end of
the reporting period.
C. Test of opening general ledger balances
1. Determine the opening balances are accurately D2.2
brought forward to the current period.

2. In the event of an initial engagement, determine D2.1
the requirements under SSA 510 – Initial Audit
Engagements – Opening Balances with regard
to opening balances are performed. Conclude if
the opening balances contain misstatements
that materially affect current period’s financial
statements.
3. Where the entity transferred its general ledger
balance from one accounting system to another
(or from manual to electronic accounting system)
during the period, check if the balances are
accurately and completely transferred to the new
system.
4. In the event that there is a new accounting policy
adopted (or changed in accounting policy) during
the period, consider the retrospective effect of
such change on the opening balances.
D. Review of journal entries and unusual
transactions
1. Perform procedures to test for management D3
override of controls, including test of journal
entries, test of accounting estimates and review
for unusual transactions.
Client: Ref:
Year end: D1
Results
Y/N
E. Test of closing general ledger balances
1. Determine if the trial balance as at the date of
the financial statements is correctly compiled
from the closing general ledger. Check that the
final financial statements have been agreed to
the updated trial balance incorporating all audit
and/or management late adjustments.
IV. CONCLUSION
Yes No NA Comments
1 There are no exceptions in our response to the risk
identified in C9.
2 The work has been performed as planned and the findings
and results have been adequately documented.
3 There are no additional comments to be included in the If no, amend A3 or
letter of representation A3 or letter of comment A8. Where A8 accordingly.
applicable, the planned extent of reliance on internal
controls in this area remains appropriate.
4 All necessary information has been collected for the
presentation and disclosure in the financial statements.

5 Misstatements identified (other than those deemed to be
clearly trivial) have been recorded in A5.
6 Initial materiality and/or risk assessment need not be
revised in view of the audit evidence obtained. If no, include in A4
and consider the
impact on the
remainder of the
audit work and on
any work
undertaken to date.
7 Sufficient appropriate evidence has been obtained to If no, include in A4

support the audit objectives. and consider the
effect on audit
opinion in A6.

Date: Date:
Client: Ref:
Year end: D1.1
AUDITOR'S ASSESSMENT OF APPROPRIATENESS OF FUNCTIONAL CURRENCY
Obtain management’s assessment of the functional currency (D1.2) and evaluate whether management has
appropriately assessed and determined the functional currency of the entity in accordance with the requirements of FRS
21 - The Effects of Changes in Foreign Exchange Rates.
An entity’s functional currency reflects the underlying transactions, events and conditions that are relevant to it.
Accordingly, once determined, the functional currency is not changed unless there is a change in those underlying
transactions, events and conditions.
Auditor’s assessment
Management’s and procedures
Currency
comments on performed to corroborate
in use
the indicator management’s
assessment
A. Primary indicators
1. The currency:
(a) That mainly influences sales prices for goods
and services; and
(b) Of the country whose competitive forces and
regulations mainly determine the sales prices
of its goods and services.
2. The currency that mainly influences labour, material
and other costs of providing goods or services.

B. Other indicators
1. What is the currency in which funds from financing
activities are generated?
2. What is the currency in which receipts from operating
activities are usually retained?
3. Are activities of the foreign operation(s) an extension
of reporting entity?
4. Are transactions with the reporting entity a high or low
proportion of the activities in the foreign operation(s)?

5. Do the cash flows arising from the activities in the
foreign operation(s) directly affect the cash flow of the
reporting entity and are they readily available for
remittance?
6. Is the cash flow from the activities of the foreign
operation(s) sufficient to service its own debt
obligations?
Conclusion:
Based on our assessment of the entity’s business and records and corroborative procedures performed to
evaluate management’s assessment of the functional currency of the entity, we conclude that the assessment of
_______________ as the functional currency is (reasonable / unreasonable).
Date: Date:
Client: Ref:
Year end: D1.2
MANAGEMENT'S ASSESSMENT OF FUNCTIONAL CURRENCY

(To be completed by management)
Management to provide their basis of determining the functional currency of the entity in accordance with the requirements
of FRS 21 - The Effects of Changes in Foreign Exchange Rates.
Comment on the consideration of

Currency the indicator and basis to support
in use the choice of the functional
currency
A. Primary indicators
1. The currency:
(a) That mainly influences sales prices for goods and
services; and
(b) Of the country whose competitive forces and
regulations mainly determine the sales prices of its
goods and services.
2. The currency that mainly influences labour, material and
other costs of providing goods or services.
B. Other indicators
1. What is the currency in which funds from financing activities
are generated?
2. What is the currency in which receipts from operating
activities are usually retained?
3. Are activities of the foreign operation(s) an extension of
reporting entity?
4. Are transactions with the reporting entity a high or low
proportion of the activities in the foreign operation(s)?
5. Do the cash flows arising from the activities in the foreign
operation(s) directly affect the cash flow of the reporting
entity and are they readily available for remittance?

6. Is the cash flow from the activities of the foreign
operation(s) sufficient to service its own debt obligations?
Conclusion:
We have carefully considered the above factors and the requirements of FRS 21 on the assessment of
functional currency of the entity. We confirmed that based on the nature of the entity’s business and
transactions during the period, the functional currency of the entity continues to be _________________.
DIRECTOR
Client: Ref:
Year end: D1.3
EVALUATE THE USE OF FOREIGN CURRENCY EXCHANGE RATES
A foreign currency transaction shall be recorded, on initial recognition of the functional currency, by applying to the
foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of
the transaction.
Results
Y/N/NA
A. Test of foreign currency exchange rates used
1. Obtain the entity’s foreign currency exchange rates used
during the period (i.e. transaction recording rates; month-end
translation rates).
2. Compare the entity’s rates to externally-sourced foreign
currency exchange rates. Investigate if there are material
differences in the exchange rates used (i.e. >“x”% difference)
as these may be indicative of use of non-market rates for
recording.
3. Conclude if the entity’s foreign currency exchange rates are
reasonable and reliable.
In some instances, the entity uses a rate that approximates
the actual rate at the date of the transaction, for example, an
average rate for a week or a month might be used for all
transactions in each foreign currency occurring during that
period. However, if exchange rates fluctuate significantly, the
use of the average rate for a period may be inappropriate.
4. Use the entity’s foreign currency exchange rates when
performing test of the recording of foreign currency
transactions and the period end translation of monetary
balances into the entity’s functional currency.
B. Test of translation of foreign currency balances and
transactions
1. Check if material monetary assets and liabilities which are
denominated in foreign currencies at period end are
translated at the entity’s closing rates (which are tested to be
reasonable in the aforesaid procedures).
2. Generally, monetary assets and liabilities include but not
limited to:
(a) Cash and bank balances
(b) Trade and other receivables
(c) Trade and other payables
(d) Bank borrowings, including bills payable and overdraft
3. Check if the exchange differences arising on the settlement

of monetary items or on translation of monetary items at
period end rates are recognised in profit or loss in the period
in which they arise.
Client: Ref:
Year end: D1.3
Results
Y/N/NA
4. For test of foreign currency transactions relating to non-
monetary assets and liabilities, such as purchase of
inventory/property, plant and equipment denominated in
foreign currency during the period, check if the carrying
amount is translated at the entity’s exchange rate at the date
of the transaction (i.e. spot rate).
CONCLUSION
Based on our work performed, we are satisfied that:
i. the foreign currency exchange rates used by management during the period for recording transactions and
translating monetary balances approximate market-sourced rates; and
ii. the foreign currency exchange rates used by management during the period for recording transactions and
translating monetary balances provided to us for testing had been used consistently and appropriately
during the period.
Date: Date:
Client: Ref:
Year end: D2.1
TEST OF OPENING GENERAL LEDGER BALANCES (INITIAL ENGAGEMENT)
This programme should be used in circumstances where an audit is being undertaken for the first time.
Results
Initials and
WP ref satisfactory
date
Y/N/NA
A. Planning
1. Review the accounts and auditor’s report for the previous
period for any information relevant to opening balances or
disclosures.
2. Where an audit was conducted in the previous period
consider one or more of the following:
(a) Review of the predecessor auditor's working
papers to obtain evidence regarding the opening
balances.
(b) Evaluate whether audit procedures performed in
the current period provide evidence relevant to the
opening balances.
(c) If the engagement team is unable to review the
predecessor auditor’s working papers or if they are
unable to rely on the work done by the predecessor
auditor, perform specific audit procedures to obtain
evidence regarding the opening balances which are
material and of a higher risk.
3. Where there was no audit performed in the previous
period, detail the steps to be taken to confirm that the
comparative figures are reasonable.
4. Determine whether the prior period's closing balances
have been correctly brought forward to the current period
or restated, where appropriate, to reflect the proper use of
accounting policies.
5. Summarise the significant balance sheet opening
balances and the significant accounting policies.
6. Do opening balances contain misstatements that could
affect the current period?
7. Determine the risk of material misstatements in the current
period's financial statements due to misstatements in the
brought forward figures.
8. Obtain sufficient evidence to confirm that the current
period's accounting policies have been correctly applied in
respect of the opening balances.
9. Consider the impact of any modification to the previous
year's auditor’s report on the report for the current period.

Client: Ref:
Year end: D2.1
Results
Initials and
WP ref satisfactory
date
Y/N/NA
B. Completion
1. Have the accounting policies been consistently applied
throughout the current period?
2. Are the results and ratios consistent and in accordance
with the audit evidence obtained?
3. Were the results of the audit work undertaken on opening
balances and comparatives satisfactory?
4. Has management been informed where there is a
misstatement of the opening balances that could materially
affect the current period's figures?
5. Where corresponding amounts have been adjusted as
required by relevant legislation or accounting standards,
have the appropriate disclosures been made?
CONCLUSION
(a) the opening balances do not contain misstatements that materially affect the current period’s financial
statements; and
(b) appropriate accounting policies reflected in the opening balances have been consistently applied in the
current period’s financial statements, or changes thereto are appropriately accounted for and
adequately presented and disclosed in accordance with the applicable financial reporting framework.
Date: Date:
Client: Ref:
Year end: D2.2
TEST OF OPENING GENERAL LEDGER BALANCES (RECURRING ENGAGEMENT)
This programme should be used in circumstance where we have audited the previous period.
Results
Initials and
WP ref satisfactory
date
Y/N/NA
A. General
1. Obtain a copy of the previous period’s signed financial B6
statements (B6) and agree the balances on the balance
sheet to the opening balances in the general ledger for the
current period.
2. Where the balances do not agree, obtain reconciliation
from the client and verify the reconciliations to supporting
documents.
3. Evaluate the effect of any adjusting journal entries for the
opening balances in our current period audit.
B. Opening balances
1. Consider whether:
(a) the comparative information agrees with the
amounts and other disclosures presented in the
prior period or, where appropriate, have been
restated or adjusted;
(b) the accounting policies reflected in the comparative
information are consistent with those applied in the
current period; and
(c) changes in accounting policies have been properly
accounted for and adequately presented and
disclosed.
2. Investigate any apparent misstatements in the
comparative figures to determine whether there is a
material impact on the current period accounting or
disclosure and communicate the misstatements with
management and those charged with governance.
CONCLUSION
(a) the opening balances do not contain misstatements that materially affect the current period’s financial
statements; and
(b) appropriate accounting policies reflected in the opening balances have been consistently applied in the
current period’s financial statements, or changes thereto are appropriately accounted for and
adequately presented and disclosed in accordance with the applicable financial reporting framework.
Date: Date:
Client:
Year end:
Guidance Template – Test of Opening General ledger balances (recurring e
(Note: The auditor should consider performing and documenting the opening balance test at B6 instead of creating a separate wo
performed and conclusion would remain the same.)
Objective:
To obtain reasonable assurance that the opening balances in the general ledger as of DD/MMM/YYYY (beginning of current perio
closing balances of DD/MMM/YYYY (End of prior period).
Balance per prior year audited Opening balance per General

Account balance
financial statements Ledger
[1] [2]
E A
1. Accumulated profits
2.
3.
4.
5.
…
E: Extracted from PY audited financial statements as at DD/MMM/YYYY (End of prior period).

A: Extracted from GL balance as at DD/MMM/YYYY (beginning of current period).
Conclusion
Based on work done, I am satisfied that the opening balances in the general ledger is correctly brought forward from prior year.
Prepared by:
Date:
Ref:
D2.2GT
nstead of creating a separate working paper. The objective, work to be
YYYY (beginning of current period) is correctly brought forward from the
Difference Explanation of difference
[1]-[2] (t/m ref)
rought forward from prior year.
Reviewed by:
Date:
Client: Ref:
Year end: D3
TEST FOR MANAGEMENT OVERRIDE OF CONTROLS
The risk of management override of controls is a significant risk because of the greater management intervention to
‘manipulate’ accounting treatment especially in the non-routine transactions or judgemental matters. Accordingly, the
auditor is required to design and perform the procedures to address the risk of management override of control.
Results
Y/N/NA
A. Review of journal entries and other adjustments
1. Review the appropriateness of journal entries recorded in
the general ledger and other adjustments made in the
preparation of the financial statements including:

(a) Making inquiries of individuals involved in the
financial reporting process about inappropriate or
unusual activities relating to the processing of
journal entries and other adjustments;
(b) Updating inquiry with individuals involved in the
financial reporting process performed in C5 if such
inquiry was performed before year end date;

(c) Perusing through journal entries recorded in the
general ledger for items such as:
(i) unusual material items that do not arise in the
ordinary course of the business;
(ii) adjustments made at the end of reporting
period; and
(iii) recurring adjustments made at the end of
reporting period.
(d) For material and/or unusual items noted from

performing (c) above, examine supporting
documents to ensure appropriate accounting
treatment has been recorded in the general ledger.
2. Consider the need to test journal entries and other
adjustments throughout the period. Summarise exceptions
noted, if any.
B. Test of accounting estimates
1. Review accounting estimates for bias and evaluate
whether the circumstances producing the bias, if any,
represent a risk of material misstatement due to fraud and
document in C9.
2. As part of the above review:
(a) Evaluate whether the judgement and decisions
made by management in making the accounting
estimates included in the financial statements, even
if they are individually reasonable, indicate a
possible bias on the part of the entity’s
management that may represent a risk of material
misstatement due to fraud;
(b) Where there is an indication of bias, re-evaluate the
assessment of all accounting estimates; and
Client: Ref:
Year end: D3
Results
Y/N/NA
(c) Perform a retrospective review of management
judgement and assumptions related to significant
accounting estimates reflected in the financial
statements of the prior period.
3. Consider the following procedures where estimates are
used by management:
(a) Obtain audit evidence about the general reliability
of the entity’s estimation procedures and methods,
including relevant control activities;

(b) Consider whether adjustments to any estimates
may be required;
(c) Consider whether differences between actual
results and previous estimates have been
quantified and appropriate adjustments or
disclosures have been made, where necessary;
and
(d) If expert opinion is sought, consider whether the
assessment of the independence of the expert and
basis of the underlying assumptions have been
performed.
C. Unusual transactions
For significant transactions that are outside the ordinary
course of business for the entity, or that otherwise appear
to be unusual given the auditor's understanding of the
entity and its environment and other information obtained
during the audit, evaluate whether the business rationale
of the transactions suggests that they may have engaged
in fraudulent financial reporting or to conceal
misappropriation of assets.
Client: Ref:
Year end: D3
CONCLUSION
Yes No NA Comments
1 There are no exceptions in our response to the risk
identified in C9.

3 There are no additional comments to be included in the
letter of representation A3 or letter of comment A8. Where If no, amend A3
applicable, the planned extent of reliance on internal or A8 accordingly.

6 Initial materiality and/or risk assessment need not be If no, include in
revised in view of the audit evidence obtained. A4 and consider
the impact on the
remainder of the
audit work and on
any work
undertaken to
date.
7 Sufficient appropriate evidence has been obtained to

support the audit objectives. If no, include in
A4 and consider
the effect on audit
opinion in A6.
Date: Date:
Client:
Year end:
GUIDANCE Template – Test for management override of controls

Review of journal entries and unusual transactions Template
Objective:
Test the appropriateness of journal entries recorded in the general ledger and other adjustments made in the preparation of the fi
Documentation of work done:
Classification of JE
Journal entry
based on above Posting date
document #
scope
1.
2.
3.
4.
5.
Conclusion
Based on work done, satisfied that the journal entries recorded in the general ledger and other adjustments made in the preparati
Date: Date:
Ref:
D3GT
of controls
other adjustments made in the preparation of the financial statements.
Description of journal entry Account # Account name Amount
Dr
Cr
Dr
Cr
ledger and other adjustments made in the preparation of the financial statements are not unusual and not indicative of management override of controls.
Nature and work
done to Exception
corroborate for noted?
evidence of (Yes/No)
appropriateness
nagement override of controls.

Client: Ref:
Year end: D4
TEST OF CLOSING GENERAL LEDGER BALANCES

Results
Initials and
WP ref satisfactory
date
Y/N/NA
A. General
1 Obtain the trial balance and general ledger as at
the end of reporting period.
2 Agree the amount for the respective line items
on the trial balance to the general ledger.

3 Check if all balances in the trial balance are
properly and completely carried forward to the
respective lead schedule.
4 Determine if the grouping of items on trial
balances to the respective lead schedule is
proper and appropriate.
5 Check arithmetical accuracy of the trial balance
and financial statements and/or any supporting
schedules obtained from the entity’s
management.
6 Agree or reconcile the respective lead schedule
to the management accounts.
B. Resolve material differences between
general ledger and trial balance
1 When there are material differences between
the general ledger and trial balance, obtain
management’s explanation on the causes and
evaluate if there is an existence of internal
control failure over the financial reporting
process.
2 Request management to correct the differences
and provide the revised trial balances and
general ledger for audit.
3 When management refuses to revise, consider
to include in A4 and assess the impact to the
audit.
C. Obtain updated trial balance and final cross
referenced financial statements
1 Upon the completion of the audit, communicate
all proposed audit adjustments and/or re-
classification adjustments with management.

2 Obtain management’s comments and
agreement to the proposed adjustments. If
management disagrees with the proposed
adjustments, document nature of disagreement
in A4 and consider the effect on our audit
opinion in A6.
3 Obtain the updated trial balance and/or
schedule incorporating the adjustments and
agree the final balances to audit working papers.

4 Check and cross-reference the respective lead
schedules to the final set of financial statements.
Check the arithmetical accuracy of the financial
statements.
Client: Ref:
Year end: D4
CONCLUSION
Yes No NA Comments
1. There are no exceptions in our response to the risk
identified in C9.
2. The work has been performed as planned and the findings

3. There are no additional comments to be included in the If no, amend A3 or
4. All necessary information has been collected for the
5. Misstatements identified (other than those deemed to be
6. Initial materiality and/or risk assessment need not be If no, include in A4
revised in view of the audit evidence obtained. and consider the
impact on the
remainder of the audit
work and on any work
undertaken to date.
7. Sufficient appropriate evidence has been obtained to If no, include in A4

effect on audit opinion
in A6.
Date: Date:
Client: Ref:
Year end: D5
AUDIT PROGRAMME - STATUTORY RECORDS AND REVIEW OF MINUTES

Results
Initials and
WP ref satisfactory
date
Y/N/NA
A. Audit of statutory records

1. Obtain the following information from the director(s)
and/or company secretary:
(a) Register of shareholders/members*
(b) Register of auditor*
(c) Register of charges*
(d) Minutes of meetings
2. *Obtain BizFile records from ACRA to verify the
names and information of the directors and officers,
and the list of shareholders/members in respect of a
private entity.
3. Review the registers and BizFile for:
(a) any appointment or resignation of directors
during the period and trace the appointments
or resignations to the approved shareholders’
resolution.
(b) any changes in directors, secretaries and
their interests in shares or debentures during
the period. Check if these changes have
been properly authorised and supported by
resolutions passed in the directors’ and/or
shareholders’ meeting. Refer to the
procedures to confirm directors’ interest in
U2.
(c) any changes in authorised and/or issued
share capital during the period. Check if the
beginning share capital corresponds with
prior year’s BizFile/register.
(d) any changes to the shareholders/members
during the period.
(e) any changes to the register of charges and
trace the charges to the supporting
documents and consider the accounting and
audit implications on the current period audit.
4. When there is a change in authorised and issued
share capital during the period, perform the related
procedure in R2.
5. Document the details of statutory records in D5.1.
Client: Ref:
Year end: D5
Results
Initials and
WP ref satisfactory
date
Y/N/NA
B. Review of minutes of meetings / resolutions
1. Obtain a copy of all minutes of meetings from

beginning of financial period till date of fieldwork.
2. Establish completeness of the minutes of meeting
by performing procedures including:
(a) Check the minutes received against the
register of minutes and enquire the person in
charge whether the register of minutes is
complete;
(b) Consider if there are any draft minutes of
meeting that might be relevant to the current
period audit not provided to us for review.
(c) Obtain a signed confirmation from the
directors or company secretary on the
completeness of the list of minutes of
meetings.
3. Review the minutes of meetings and resolutions for
potential accounting and audit implications on the
current period financial statements (D5.2).
C. Presentation and disclosure
1. Establish if there is sufficient appropriate evidence
on the file to support the financial statements
disclosures relating to the directors’ statement and
corporate information, if applicable.
Client: Ref:
Year end: D5
CONCLUSION
Yes No NA Comments
1 There are no exceptions in our response to the risk identified
in C9.
3 There are no additional comments to be included in the If no, amend A3 or
6 Initial materiality and/or risk assessment need not be revised If no, include in A4
in view of the audit evidence obtained. and consider the
impact on the
remainder of the audit
work and on any work
undertaken to date.
7 Sufficient appropriate evidence has been obtained to If no, include in A4

effect on audit opinion
in A6.
Date: Date:
Client: Ref:
Year end: D5.1
AUDIT OF STATUTORY RECORDS
OBJECTIVE
To obtain reasonable assurance that the statutory records relating to the entity as required to be kept by the Singapore
Companies Act (Cap. 50) are properly kept. [The following information may also be found in the entity’s BizFile]
WORK DONE
A. Register of members
Name and correspondence address Class of Total number Date became Date ceased to be
share of shares held shareholder shareholder
B. Register of company secretary

Name and correspondence address Identification Nationality Date of Date of
no. and Position appointment resignation
Held
C. Register of directors
Name and correspondence address Identification Nationality Date of Date of
no. and Position appointment resignation
Held
D. Register of auditor
Firm name and correspondence address Company Name of audit Date of Date of
registration partner appointment resignation
no.
Client: Ref:
Year end: D5.1
E. Register of charges
Charge no. Date registered Chargee Description Amount Date of
secured satisfaction of
charge
F. Register of minutes
Yes No NA
(a) Are the minutes of general meetings kept at the registered office or at the entity’s
principal place of business in Singapore?
(b) Are the minutes of general meetings and directors’ meetings signed by the
Chairman of the meeting at the next succeeding meeting?
(c) Are the extracts of all meeting minutes properly kept in the register of minutes?
(d) Are the minutes relating to contingent liabilities and capital commitments properly
kept in the register of minutes?
(e) Have all directors signed the declaration of directors’ interests in shares and
debentures?
G. Conclusion
Based on the work done, I am satisfied that the statutory records relating to the entity are properly kept and any
changes have been properly updated, and the accounting and audit implications arising from the directors and/or
shareholders’ meeting minutes and resolutions have been duly considered in the financial statements.
Date: Date:
Client: Ref:
Year end: D5.2
REVIEW OF MINUTES OF MEETING / RESOLUTIONS
OBJECTIVE
To review the minutes of meetings and resolutions passed by the directors and/or shareholders and consider the
related accounting and audit implications to the current period financial statements.
Accounting and audit

No. Date Summary of minutes WP Ref
implications
1.
2.
3.
4.
5.
6.
Conclusion
Based on the work done, I am satisfied that the accounting and audit implications arising from the directors and/or
shareholders’ meeting minutes and resolutions passed during the period have been duly considered and addressed
in the financial statements.
Date: Date:
Client: Ref:
Year end: E
E CASH AND BANK BALANCES

E1 Lead schedule
E2 Audit programme – Cash and bank balances
E3 Cash and bank balance schedule
E4 Bank reconciliations
E5 Bank confirmation replies
E6 Summary of bank confirmation results
Client: Ref:
Year end: E2
AUDIT PROGRAMME – CASH AND BANK BALANCES
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish cash and bank balances in the general ledger exist at the end of the reporting
period. E
2 To establish cash and bank balances at the end of the reporting period are correctly
recorded in the general ledger. C
3 To establish all monetary balances denominated in foreign currencies are translated at the
appropriate foreign currency exchange rates. V
4 To establish the client owns, or has legal rights to, all the cash and bank balances
recorded in the general ledger at the end of the reporting period. All cash and bank
balances are free of restrictions on use, liens, or other security interests or, if not, such
restrictions, liens, or other security interests are identified and disclosed in the financial R&O
statements.
5 To establish all necessary disclosures concerning cash and bank balances are accurately
made and that the information is appropriately presented and described in the financial
statements. P&D
II. ASSERTION LEVEL RISK AND SECTION PERFORMANCE MATERIALITY
Financial statements level risk per C8 L / M / H
Assertions E R&O C V P&D

Assertion level risk assessed per C8 (L/M/H)
Inherent Risk (IR) Factor (refer to table below)
Performance materiality
[Materiality/IR Factor]
Inherent Risk (IR) Factor Table
Assertion level risk

Inherent Risk (IR) Factor
L M H
L 1.2 1.4 1.6
Financial Statement level risk M 1.4 1.8 2.1
H 1.6 2.1 2.5
III. AUDIT PROCEDURE DESIGN CONSIDERATIONS

Yes No Comments
For risks identified in C8, perform the audit procedures per C9.
1 Step B
• Is the account balance significant (amount > PM) or expected to be significant at the end of the reporting
period?
• Are there any banking facilities other than the current account?
• Are there any overseas bank accounts/facilities?
• Is there a significant amount of transactions for all the bank accounts?
2 Step C
period?
• Are monthly bank reconciliations prepared by management?

3 Step D
• Are there any new bank accounts opened or existing bank accounts closed during the period?
4 Step E
• Are there significant cash transactions during the period?
5 Step F
• Are there significant cash and bank balances denominated in foreign currencies?
6 Step G
• Are there any non-compliances with FRSs in prior periods?
• Are there any changes in accounting policies during the period?
• Are there any fixed deposits with original maturity of more than 3 months?
• Are there any pledged deposits?
IV. PLANNING CONCLUSION

I am satisfied from the planned tests, sufficient appropriate evidence can be obtained to meet the audit objectives.
Date: Date:
AUDIT PROGRAMME – CASH AND BANK BALANCES
Results
satisfactory Initials and
WP ref (Y/N) date
A. General
Obtain breakdown of cash and bank balances and agree to general ledger
1 Prepare a lead schedule based on the current period’s trial
balance (B5) and prior period’s audited trial balance.
2 Obtain detailed listing of the cash and bank balances with

details such as bank name(s), account number(s), types of
deposit(s), currencies, use of account(s), interest rates, etc.
Agree cash and bank balances to lead schedule.
Perform analytical procedures

3 Carry out analytical procedures such as:
(a) comparison of the current period’s balances with that of
prior period and corroborate explanations with information
presented on the Statement of Cash Flows; and
(b) review for items above performance materiality, or those

which are otherwise unusual.
4 Determine whether there are specific risks identified from

performing analytical procedures that would cause the cash
and bank balances to be materially misstated.
B. Bank confirmation procedures – To be performed under the direct control of the auditor
1 Determine the bank accounts to be selected for confirmation
procedures.
2 For selected bank accounts, obtain confirmation from the banks
on the corresponding bank balances at the end of the reporting
period.
(a) request client to prepare the bank confirmation requests;
(b) check the requests bear the authorisation with company

stamp and signatures corresponding to those required by their
account mandates;
(c) check the details of the banks, address, department
(person) in charge against client’s records;
(d) retain a copy of the confirmation requests in file;
(e) send the bank confirmation request(s) to the bank(s) under
the auditor’s control; and
(f) promptly follow up on non-replies by sending subsequent
requests.
3 In respect of each of the confirmation reply received;
(a) record in the bank confirmation worksheet (E6);
(b) agree, or request client to reconcile, the balances and
facilities with those shown in the client’s records;
(c) verify other items confirmed by the banks such as letter of
guarantees issued, outstanding foreign exchange contracts,
securities or pledges to supporting documents, and ensure they
are properly accounted for;
(d) investigate any exception(s) not consistent with the general

ledger/financial statements disclosures. The auditor should
request a revised confirmation reply and consider impact on
other areas of audit;
Results
WP ref (Y/N) date
(e) consider whether any of the exceptions are indicative of
fraud or other
(f) validate themisstatement; andif they were received in
source of replies
electronic formats (for example: faxes or electronic mails), by
calling the banks to verify the same person confirming the
balances and if the confirmation process was interfered by the
client.
4 For non-replies on confirmation requests, request the client to

follow up with the banks.
C. Testing of bank reconciliations

1 Obtain bank reconciliations from management on bank
accounts
(a) check which
castingbalances in the
of the bank general ledger
reconciliations are
and different
obtain an
understanding of the nature of reconciling items;
(b) check uncredited deposits through to the next period
(noting dates) and vouch to relevant supporting documents to
establish that the reconciling items represent authorised
business transactions. Obtain reasons for situations where any
reconciling item has taken longer than expected before being
reflected in the bank’s records;
(c) obtain explanations and substantiate all material

adjustments on the bank reconciliations. Ensure all reconciling
items relate to recording timing differences by the bank and not
accounting errors of the client; and
(d) ensure all reconciling items are recorded in the correct
period by verifying the relevant supporting documents to
establish the dates of the transaction
2 Review the list of unpresented cheques for unusual items, such
as:
(a) stale cheques (those cheques that are outstanding for more
than 6 months), which should be written back. Investigate why
the payees did not encash the cheques and ascertain whether
they should be reversed to an appropriate payables account;
and
(b) unusually large amounts, or clearing periods that are long

and consider writing these back to payables account (or inter-
company accounts, where appropriate).
3 Perform a search for unrecorded unpresented cheques

(together with a search for unrecorded liabilities) by selecting
cheques cleared after the end of the reporting period and verify
the dates of the underlying transactions with the corresponding
payments. For transactions before period end, ensure the
related liability is recorded before period end, or included as
part of unpresented cheques in the bank reconciliations if
recorded as paid before period end.
D. Accounts opened and closed during the period

1 Check the new bank accounts opened or existing bank
accounts closed during the period are supported by directors’
resolutions.
Results
WP ref (Y/N) date
E. Cash on hand
1 For businesses receiving cash takings,
(a) ascertain locations, custodians and amounts of all cash and
undeposited receipts at the end of the reporting period;
(b) obtain understanding of the internal controls over cash

takings;
(c) obtain certificates/confirmations from custodians for all cash
on hand balances;
(d) establish undeposited cash takings before and after the end
of the reporting period have been accounted for in the correct
period; and
(e) establish all undeposited cash takings at the end of the
reporting period have been promptly deposited in the next
period.
2 Where there are material cash on hand,
(a) agree cash balances to general ledger;
(b) observe the cash count at the end of the reporting period in
the presence of custodian and management;
(c) check all cash funds are not substituted between floats
account for shortages and be alert for non-company funds
within the cash count;
(d) review cheques, vouchers, IOUs which have been
encashed from cash funds and agree items therein are in
accordance with the client’s internal control procedures.
(e) establish completeness of cash funds;

(f) check all cheques included in cash funds are crossed “Not
Negotiable”, noting the Company’s name and Bank Account;
(g) check material cash count discrepancies are adjusted in the

current period’s financial statements. Consider inclusion of
recommendations in management letter (B6) and point to note
in next period’s audit; and
(h) prepare a cash count observation memo (E7) and

document work performed and conclusions.
F. Foreign currencies
1 Confirm the cash and bank balances are denominated in
foreign currencies are translated at the appropriate entity’s
closing rates.
G. Presentation and disclosure
1 Establish the cash and bank are properly disclosed in the
financial statements in accordance with FRSs.
2 Consider the need to complete the financial statements
disclosure checklist relating to this account to ensure
appropriate presentation and disclosure.
3 Establish there is sufficient appropriate evidence in the file to

support all disclosures made.
V. CONCLUSION Yes No N/A Comments
1 There are no exceptions in our response to the
risks identified in C9.
2 The work has been performed as planned and
the findings and results have been adequately
documented.
3 There are no additional comments to be included If no, amend A3

in the letter of representation (A3) or letter of or A8
comment (A8). Where applicable, the planned accordingly.
extent of reliance on internal controls in this area
remains appropriate.
4 All necessary information has been obtained for

the presentation and disclosure in the financial
statements.
5 Misstatements identified (other than those

deemed to be clearly trivial) have been recorded
in A5.
6 Initial materiality and/or risk assessment need not If no, include in

be revised in view of the audit evidence obtained. A4 and
consider the
impact on the
remaining audit
work as well as
work done to-
date.
7 Sufficient appropriate evidence has been If no, include in

obtained to support the audit objectives. A4 and
consider the
effect on audit
opinion in A6
Date: Date:
Client: Ref:
Year end: E6GT
SUMMARY OF BANK CONFIRMATION RESULTS

Confirmation date (if other than year end date):
No. Value ($) % Value

Total number of bank accounts & balances
Total bank accounts and balances requested for
confirmations (A)
Results of test: No. of samples Value ($) % Value

Balances confirmed (B)
Balances verified by alternative procedures (D)
Total (B+D)
Unverified balances (E =A-(B+D))
Conclusion:
Bank confirmation worksheet

A B C D E
Alternative Balances
Balance Unconfirmed procedures verified by Unverified
Bank Balance per GL
confirmed balance (A-B) undertaken on alternative balances* (C-D)
column C items procedures
S$ S$ S$ S$ S$
* If these are balances recorded in this column, the auditor is to assess the impact on the audit and take appropriate
actions where necessary.
Client: Ref:
Year end: F
F TRADE, BILLS AND OTHER RECEIVABLES

F1 Lead schedule
F2 Audit Programme – Trade, Bills and Other Receivables
F3 Trade and other receivables listing (extract)
F4 Allowance for impairment
Sample Selection Planning – Trade, Bills and Other
F5
Receivables
F6 Summary of Trade Receivables’ Confirmation Results

F7 Confirmation replies
F8 Confirmation requests
Client: Ref:
Year end: F2
AUDIT PROGRAMME - TRADE, BILLS AND OTHER RECEIVABLES
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish all receivables recorded in the general ledger exist at the end of the reporting
period. E
2 To establish all credit sales transactions occurred on or before period end are correctly
recorded in the general ledger. C
3 To establish the entity owns, or has legal rights to, all the receivables recorded in the general
ledger at the end of the reporting period. All receivables are free of restrictions on use, liens,
or other security interests or, if not, such restrictions, liens, or other security interests are R&O
identified and disclosed in the financial statements.
4 To establish prepayments, deposits and other receivables (including loans and advances to
staff and directors) are correctly recorded and properly classified. C,E,V
5 To establish adequate allowance for impairment is made for doubtful receivables. V

6 To establish receivables balances denominated in foreign currencies are translated at the
7 To establish all necessary disclosures concerning receivables are accurately made and that
the information is appropriately presented and described in the financial statements. P&D


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
1 Step B
period?
• Are there significant related party balances?
• Is there any concentration of debts from a particular individual entity or group of entities?
2 Step C
• Were there any corrected or uncorrected misstatements in prior period? (B7)
• Are there any advances or lump sum payments collected from its customers?
• Are the sales returns expected to be material?
3 Step D
• Are there any factoring of receivables and/or discounting of bills receivable?
4 Step E
• Are there any interest-bearing or interest-free loans granted to related parties or third parties?
5 Step F
• Are there significant prepayments and deposits?
6 Step G
• Is the allowance for impairment of trade and other receivables excessive or inadequate based
on prior experience?
• Are there significant overdue balances?
• Is the allowance for impairment of trade and other receivables material or expected to be
material?
7 Step H
• Are there significant balances denominated in foreign currencies?
8 Step I
• Is there any concentration of debts from a particular individual entity or group of entities?
• Are there any factoring of receivables and/or discounting of bills receivable?
• Are there any interest-bearing or interest-free loans granted to related parties or third parties?

Date: Date:
AUDIT PROGRAMME – TRADE, BILLS AND OTHER RECEIVABLES
Results
WP ref (Y/N) date
A. General
Obtain breakdown of trade, bills and other receivables and agree to general ledger
1 Prepare a lead schedule based on the current period’s trial balance

(B5) and prior period’s audited trial balance with details of trade
receivables, bill receivables, other receivables, prepayments and
allowance for impairment.
2 Obtain detailed aged listing of trade receivable balances (by
customers) and respective aging. Agree total balances to lead
schedule.
3 Obtain the detailed listing of other receivables, prepayments and

deposits with details including the balances due from each director,
employees, related parties and/or other third parties indicating the
nature of these balances. Agree total balances to lead schedule.
4 When applicable, obtain the bills receivable (bills of exchange,

cheques, promissory notes) listing detailing the face value, maturity
date, bank of issuance, as well as endorsement details. Obtain
reconciliation of the detailed listing to lead schedule.

(a) comparison of current period’s balances with that of prior period
by analysing the level of trade receivable balances against the
credit sales during the period;
(b) review and comparison of key ratios such as debtor collection
period for current and prior periods;
(c) comparison of current period’s major customers with prior
period’s;
(d) comparison of items of other receivables, prepayments and
deposits in the current and prior periods by understanding the
nature of these items; and
(e) review for items above performance materiality, or those which
are otherwise unusual.
performing analytical procedures that would cause the receivable
balances to be materially misstated.
B. Confirmation – To be performed under the direct control of the auditor

1 Determine the receivable balances to be selected for sending
confirmation.
2 For trade receivables, the confirmation procedures generally
include the following steps:
(a) request client to prepare the confirmation requests including the
details of the customers (name, address, person in charge),
balances per client’s record at period end, and any other details
that are important for audit purposes;
(b) check the balances agree to debtors’ listing at period end and
details of the customers are correct;
(c) retain a copy of the confirmation request in the file; and

Results
WP ref (Y/N) date
(d) send the confirmation requests to the customers under the
auditor’s control.
3 For other receivables, the confirmation procedures generally
(a) request client to prepare the confirmation requests including the

details of the parties (name, address, person in charge), balances
per client’s records at period end, and any other details that are
important for audit purposes;
(b) for loans receivable from third parties, related parties and/or
directors and employees of the entity, consider including the
following information in the confirmation requests:
(i) principal amounts;

(ii) interest rates, if applicable;
(iii) duration of the loans;
(iv) key terms; and
(v) other important information to ascertain the accounting
treatment of the receivables.
(c) check the balances and agree to detailed listing on the general
ledger or any applicable client’s record and details of the parties
are correct;
(d) retain a copy of the confirmation requests in the file; and

(e) send the confirmation requests to the parties under the
4 In respect of each reply:

(a) record it in the confirmation control sheet;
(b) agree the balance to that shown in the client’s records;
(c) investigate any exceptions and review the reconciliations
provided by the client;
(d) consider whether any of the exceptions is indicative of fraud or
other misstatement; and
(e) consider validating the source of replies if received in electronic
format (for example, fax or electronic mail).
5 For non-replies within a reasonable period, send a follow-up
request. Consider whether sufficient and appropriate evidence can
be obtained by performing alternative procedures for non-replies,
e.g., by verifying to relevant and appropriate supporting
documents.
C. Investigate credit balances in receivables accounts

1 Examine list of all credit balances and perform the following
procedures:
(a) Inquire and document the reasons for credit balances. Confirm
against our understanding over the sales and receivables process
whether the credit balances are explainable;
(b) if the credit balances are due to over-payments from

customers, trace payments received to bank balances, cash ledger
and bank-in slips. Consider if the credit balances should be
reclassified to payables.
(c) if the credit balances are due to sales returns or other
adjustments to sales and/or receivable balances, investigate and
ascertain whether they are accounted for appropriately.
Results
WP ref (Y/N) date
D. Bills receivable and transfer of financial assets
1 Request the management to provide a reconciliation of the bills
receivable listing to general ledger. Check that:
(a) bills endorsed by client to third parties (e.g.: suppliers) or

discounted to banks without recourse should be derecognised if
the client has transferred all risks and rewards of ownership of the
transferred assets (such as discount without recourse
arrangement);
(b) in the event when client has retained substantially all the risks
and rewards of ownership of any transferred assets, the client
continues recognising such assets as receivables and that a
financial liability is recognised for the consideration received.
2 In determining whether the client has retained or transferred

substantially all the risks and rewards of ownership of any
transferred assets, consider whether the client has continuing
involvement in the transferred assets by way of:
(a) retaining the contractual rights to receive the cash flow of the
financial assets; and
(b) retaining the obligation to pay the cash flow to one or more
recipients in the event of default.
In such situations, the client should not derecognise the transferred
assets and should continue to recognise until the recognition
criteria of a financial assets are met.
3 Review details in the bank confirmation replies and agree details to
the bills receivable listing to ensure completeness.
E. Loans receivable
1 In addition to sending confirmations, consider to perform the
following procedures:
(a) For loans in existence at the period end, verify that:
- security exists and is in the hands of the entity;
- the value of security is adequate;
- any allowance for impairment made for loans is adequate; and
- confirmations of the loans agree with the balances as well as any

terms and conditions, e.g.: interest rates and repayment terms.
(b) Check loans granted during the period are properly authorised,
in particular loans to directors and officers are supported by proper
shareholders’ resolutions;
(c) Check loan repayments are received on the due date and
correctly recorded;
(d) Check interest on loans receivable is:
- correctly recorded;
- received on the due dates; and
- correctly accrued at the period end.
(e) Consider whether any allowance for impairment is necessary.
Results
WP ref (Y/N) date
Interest-free loans
2 Trade and other receivables are financial assets classified as
‘loans and receivables’, which are to be carried at amortised cost
using the effective interest rate method.
(a) Enquire and document the repayment terms of the receivables;
(b) In respect of the receivables expected to be settled after one

year, check the fair value computation, including (but are not
limited to) the use of discount rate, the repayment term and the
principal amount;
(c) In respect of receivables with related parties or immediate

holding company, consider if the fair value adjustments are part
of equity; and
(d) Check the fair value adjustments are properly accounted for
and recorded properly.
F. Prepayments and deposits
1 Obtain a list of prepayments and perform the following procedures:
(a) test arithmetical accuracy;

(b) vouch material items to external audit evidence such as bank
statements, agreements and third party invoices;
(c) check the amortisation of prepayment to profit or loss in the
current period; and
(d) review for reasonableness and verify significant/unusual items
and compare with last period’s items.
2 Obtain a list of deposits and perform the following procedures:
(a) Ascertain the nature of the deposits and check to relevant

agreements or proof of payments for its existence;
(b) Review for reasonableness and verify significant/unusual items

and compare with last period’s items;
(c) Consider the outstanding amount of contract sum in relation to

the deposits paid for assets as capital commitments; and
(d) Consider whether the long and short term portion of deposits
are classified appropriately.
G. Impairment review
1 Perform an assessment of the recoverability of all receivables:
(a) Review management’s assessment on the debtors’ ability to

repay the outstanding amounts, including:
(i) reviewing the subsequent receipts and correspondences with
the debtors;
(ii) examining past payment patterns; and
(iii) inquiring into any disputed balances that may not be
recoverable.
Consider all outstanding debts that are:
(i) overdue, with special attention to those that are overdue for
more than ___ days; and
(ii) greater than the performance materiality (regardless of whether
they are overdue or not).
Results
WP ref (Y/N) date
(b) For those balances with recoverability issues as identified in
Step 1(a), discuss the collectability of the account with
management and obtain additional support to verify the allowance
for doubtful accounts is appropriate.
2 Conclude our assessment on impairment of receivables. In the

event of management’s disagreement, consider to bring the matter
for discussion with those charged with governance.
H. Foreign currencies
1 Confirm all receivable balances denominated in foreign currencies
are translated at the appropriate closing rate and all non-monetary
assets (e.g. prepayments) have been translated at the appropriate
historical rate.
I. Presentation and disclosure

1 Establish the receivables are properly disclosed in the financial
statements in accordance with FRSs.
2 Consider the need to complete the financial statements disclosure
checklist relating to this account to ensure appropriate presentation
and disclosure.
V. CONCLUSION Yes No NA Comments

1 There are no exceptions in our response to the risks
identified in C9.
2 The work has been performed as planned and the
findings and results have been adequately
documented.
3 There are no additional comments to be included in If no, amend A3
the letter of representation (A3) or letter of comment or A8
(A8). Where applicable, the planned extent of reliance accordingly.
on internal controls in this area remains appropriate.
4 All necessary information has been obtained for the

presentation and disclosure in the financial
statements.
5 Misstatements identified (other than those deemed to
be clearly trivial) have been recorded in A5.
revised in view of the audit evidence obtained. A4 and
consider the
impact on the
remaining audit
work as well as
work done to-
date.
7 Sufficient appropriate evidence has been obtained to If no, include in

support the audit objectives. A4 and
consider the
effect on audit
opinion in A6
Date: Date:
Client: Ref:
Year end: F5
SAMPLE SELECTION PLANNING – TRADE, BILLS AND OTHER RECEIVABLES
Table of risk assessment factor

Approximate number of
Assertion level risk (C8)
transactions in a period/
Financial L M H within the account balance:
Statement level
risk (C8) L 1.2 1.4 1.6
M 1.4 1.8 2.1
H 1.6 2.1 2.5
Assessed risk at financial statement level (L, M or H)
Assertions:
Existence (E), Rights & Obligations (R&O), Completeness (C), Valuation (V), Classification, E R&O C V P&D
Presentation and Disclosure (P&D)
Assessed risks at assertion level (L, M or H)
Any change in assessed risks from the previous period? (If yes, specify)
Overall materiality (C3)
Controls Reliance Strategy L M H
Sampling risk factor
TOD and Test of controls (TOC) =
Risk assessment factor (table figure) x 2/3
Performance materiality (PM)

PM = Overall materiality (C3) =
Risk assessment factor (table figure)
Sample size computation
No. of samples Value
Monetary value of population

Value of items above performance materiality [A]
Value of scheduled other "key" items [B]

Specify ‘key’ item:
Value of residual population
Sample size for residual population No. of samples
= Value of residual population = (Rounded up) [C]
(Overall materiality ÷ Sampling risk factor)
Total sample size (actual to be tested) = [A]+[B]+[C]

L M H
Substantive Strategy
Test of details (TOD) only = Risk assessment factor (table figure)
OR
TOD and Substantive analytical procedures (SAP) =

Risk assessment factor
(table figure)


Assertions:
E R&O C V P&D
Existence (E), Rights & Obligations (R&O), Completeness (C), Valuation (V), Classification,
Presentation and Disclosure (P&D)
Number of sample size by assertion
CONCLUSION
I am satisfied that the actual sample size computed will be sufficient to enable us to draw conclusions over the population for the assertion identified.
Initial Date Initial Date

Client: Ref:
Year end: F6GT
SUMMARY OF TRADE RECEIVABLES’ CONFIRMATION RESULTS

As at

Total trade receivables balances
Total balances circularised (A)

Balances verified by alternative procedures (D)
Total (B+D)
Unverified balances (E =A-(B+D))
Conclusion:
Receivables’ confirmation worksheet

A B C D E
Alternative Balances
Balance Unconfirmed procedures verified by Unverified
Customer Balance per GL
confirmed balance (A-B) undertaken on alternative balances* (C-D)
column C items procedures
S$ S$ S$ S$ S$
* If these are balances recorded in this column, the auditor is to assess the impact on the audit and take appropriate
actions where necessary.
Client: Ref:
Year end: G
G INVENTORY

G1 Lead schedule
G2 Audit programme - Inventory
Audit programme – Physical inventory count
G2.1
observation
G3 Inventory listings
G4 Inventories held by third parties
G5 Sample selection planning - Inventory
G6 Inventories – Physical quantity count test
G7 Inventories – Physical count compilation test
G8 Inventories – Cost and cost flow tests
G9 Inventories – Net Realisable Value (NRV) test
Client: Ref:
Year end: G2
AUDIT PROGRAMME – INVENTORY
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish all inventories recorded in the general ledger exist at the end of the reporting period.
E
2 To establish all inventories at the end of the reporting period are correctly recorded in the general
ledger. C
3 To establish inventories are valued correctly, consistently and in accordance with the client’s
accounting policies. Inventories acquired in foreign currencies are translated at the appropriate
V
foreign currency exchange rates.
4 To establish adequate write-down is made for all damaged, obsolete or slow moving inventories.
V
5 To establish the entity has the legal title or rights of ownership to the inventories recorded in the
general ledger at the end of the reporting period. R&O
6 To establish all necessary disclosures concerning inventories are accurately made and that the
information is appropriately presented and described in the financial statements. P&D


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
1 Step B
• Is the account balance significant (amount > PM) or expected to be significant at the end of the reporting period?
• Is the management unable to perform a full physical inventory count?

• Are there significant inventories on consignment?
• Are there significant inventories held by third parties?
• Is the auditor unable to obtain confirmation from third parties on inventories on consignment?
2 Step C
• Are the costs of the inventories determined other than by supplier invoices?
• Are the costs of the inventories at the end of the reporting period determined by manual calculations?
• Are there different types of inventories accounted for using different methods?
• Are the actual physical inventory flows similar to the cost flow methods used?
• Are there any purchases of inventory denominated in foreign currencies?
• Is the allowance for inventories obsolescence material or expected to be material?
• Is the allowance for inventories obsolescence excessive or inadequate based on prior experience?
3 Step D
• Is the allowance for inventories obsolescence material or expected to be material?
• Are the inventories pledged for loans granted to the entity?
V. PLANNING CONCLUSION
Date: Date:
AUDIT PROGRAMME – INVENTORY
Results
WP ref (Y/N) date
A. General
Obtain breakdown of inventories and agree to general ledger
(B5) and prior period’s audited trial balance with details of the raw
materials, work in progress, finished goods or other items where
applicable.
2 Obtain detailed listing of the inventories with details of quantity,

carrying amount and agree total inventory value to balances in the
lead schedule. The inventory listing should be grouped according to
the same classification as the balances in the lead schedule.
3 Obtain the reconciliation from the client on the differences between

detailed inventory listing (per general ledger) and inventory system
and/or final inventory listing.
4 Check the validity of the material reconciling items and documents in

our working papers.

(a) comparison of current period balances with that of prior period by
analysing the level of inventories against the current period’s
business performance;
(b) review and comparison of inventory quantity, unit cost, inventory

turnover, gross profit margin, etc.; and
(c) review for items above performance materiality, or those which
6 Determine whether there are specific risks identified from performing
analytical procedures that would cause the inventory balances to be
materially misstated.
B. Quantity test
1 Complete Audit Programme G2.1 – Physical Inventory Count
Observation, ascertain whether there is anything in the inventory
count report that requires us to revise our risk assessment for
inventory.
2 In the event where the final inventory listing is significantly different

from the physical inventory count listing, evaluate the reason(s) and
determine if the physical inventory count remained reliable and
sufficient appropriate audit evidence was obtained.
Compilation test
3 Establish the inventory count records have been correctly compiled
into the final inventory listing and that the final inventory listing is
supported by the inventory count records.
(a) obtain understanding of the inventory compilation process and

evaluate if the final inventory listing accurately reflects the inventory
count results;
(b) obtain the full set of the inventory count records used by the
management for the compilation and compare against the copies of
the inventory count records obtained during the inventory count
(including those counted by the auditor during the observation) to
establish that there is no alteration to the inventory count records
subsequent to the inventory count;
Results
WP ref (Y/N) date
(c) select samples from the inventory count records (including those
counted by the auditor during the observation) and verify that the
inventory quantity has been correctly included in the final inventory
listing;
(d) select samples from the final inventory listing and verify to the
inventory count records to ensure that the quantity is supported by
the inventory count records; and
(e) follow up on obsolete or slowing moving items identified during

the inventory count and ensure that relevant allowances have been
made, or item had been excluded from the final inventory listing.
Cut-off
4 Establish the inventory movements are recorded in the appropriate
periods:
(a) Perpetual inventory system – Select inventory movement records
before and after period end and vouch to relevant supporting
documents to ensure that the inventory is recorded in the correct
period;
(b) Periodic inventory system – To be performed together with sales

and purchase cut-off testing.
C. Valuation test
1 Obtain understanding on how inventory costings are measured:
(a) components of inventories, i.e. cost of purchase, cost of

conversion (see procedure below) and other costs incurred in
bringing the inventories to their present location and condition;
(b) costing method, i.e. FIFO or weighted average;

(c) inquiry if there is any change in costing method during the period
and the rationale for the change; and
(d) perpetual or periodic inventory systems, i.e. to understand when
and how the inventory costs are transferred from one stage to
another.
2 Procedures to test the accuracy of cost of inventories at the end of
the reporting period:
(a) select the samples from the final stock listing or detailed inventory
listing (general ledger);
(b) obtain the information as to how the unit or total cost of inventory
of that particular sample is made up;
(c) trace to the supporting documents such as supplier invoices,
costing records and other sources to check the validity of the cost;
(d) ensure cost denominated in foreign currencies are translated

using the client’s spot rates;
(e) test the allocation of overhead expenses;
(f) test the arithmetical accuracy of the calculations; and
(g) test the consistency, in principal and in detail, with which the
amounts have been computed.
3 If the auditor has proven the client’s perpetual inventory system to be
reasonably reliable upon the test of IT application control,
considerations should be given to test the cost of inventories during
the control stage (dual purpose testing).
Results
WP ref (Y/N) date
4 Procedures to test costs of conversion:
(a) obtain and review the costing records of certain months of the
period, check arithmetic accuracy of the records and agree to the
general ledger;
(b) check the allocation of fixed production overheads to the costs of

conversion are consistently applied and is based on the normal
capacity of the production facilities;
(c) where there is a change in the production capacity used to
allocate fixed production overhead, inquire the rationale for change
and substantiate with the relevant department and assess the
reasonableness for such change;
(d) test the variable production overheads and labour and check that
they are allocated to each unit of production based on the actual use
of the production facilities and labour hours. Ensure this is applied
consistently across to each unit of production.
(e) where the costs of conversion of each product are not separately
identifiable, test the allocation between the products and check the
rational is consistently applied.
(f) For by-products, check that they are measured at net realisable
value and the value is deducted from the cost of the main product.
(g) check unallocated overheads are recognised as an expense in

the period in which they are incurred.
5 Document the samples tested and procedures performed in the
working papers. When there is an exception, the auditor considers
whether there is a need to expand the sample size and/or
extrapolate the amount of error to assess its impact to the inventory
balance at the end of the reporting period.
Net Realisable Value (NRV) test

6 Procedures to test if the inventories have been properly stated at
lower of cost or its NRV:
(a) select the samples of finished goods from the final stock listing or
detailed inventory listing (general ledger);
(b) obtain the details of subsequent sales (if any), when there is no
subsequent sale, consider using the market selling price of the same
product;
(c) compare the unit cost of the finished goods against the unit
selling price less the estimated costs of completion and the
estimated costs incurred to make the sale.
(d) where selling price less cost mentioned in (c) above is higher
than unit cost of client’s finished goods, no write-down of inventory is
required; and
(e) where the selling price less cost is lower than the unit cost,
consider the amount of inventory costs to be written down.
Results
WP ref (Y/N) date
7 Inventories are usually written down to NRV item by item. In some
circumstances, however, it may be appropriate to group similar or
related items. This may be the case with items of inventory relating to
the same product line that have similar purposes or end uses, are
produced and marketed in the same geographical area, and cannot
be practicably evaluated separately from other items in that product
line. It is not appropriate to write inventories down on the basis of a
classification of inventory, for example, finished goods, or all the
inventories in a particular operating segment (FRS 2.29).
Losses on one item cannot be set off against profits on another.
8 Where a provision is made on a finished product consider whether

any provision should be made against unfinished units and materials
used in the process.
Write-down of inventories
9 Obtain details of the write-down of inventories at the end of the
reporting period and enquire from the management on the basis of
computation.
10 When the client determines the write-down of inventories on the
basis of a formula consider whether:
(a) it is appropriate for the nature of business;
(b) it is consistent;
(c) it has been accurately applied;
(d) the formula relies on the age of the inventories, to check that the
ageing is accurate; and
(e) the basis is supported by the actual experience of the business.
11 Conclude our assessment on the write-down of inventories. In the

event of management’s disagreement consider to bring the matter for
discussion with those charged with governance.
D. Presentation and disclosure

1 Establish the inventory is properly disclosed in the financial
and disclosure.
3 Establish there is sufficient appropriate evidence in the file to support
all disclosures made.

identified in C9.
documented.
3 There are no additional comments to be included in If no, amend
the letter of representation (A3) or letter of comment A3 or A8
(A8). Where applicable, the planned extent of accordingly.
reliance on internal controls in this area remains
appropriate.

statements.
Yes No N/A Comments
6 Initial materiality and/or risk assessment need not be If no, include

revised in view of the audit evidence obtained. in A4 and
consider the
impact on the
remaining
audit work as
well as work
done to-date.
7 Sufficient appropriate evidence has been obtained to If no, include

support the audit objectives. in A4 and
consider the
effect on audit
opinion in A6
Date: Date:
Client: Ref:
Year end: G2.1
AUDIT PROGRAMME – PHYSICAL INVENTORY COUNT OBSERVATION
Results
satisfactory
WP ref (Y/N) Initials and date
A. Preparation works before observation of physical inventory count
1 Obtain a copy of the physical inventory count instruction prior to
the physical inventory count. Review whether the instruction is
clear and adequate in the design of the internal control over the
inventory count. Record the following details for each location
visited:
(a) location(s) being counted;

(b) date and timing of count and attendance;
(c) types of inventories held at each location;
(d) approximate value of inventories by category at location
(obtain from management);
(e) brief description of the count procedures adopted and count
documents used;
(f) control procedures to ensure systematic counting of inventory
so that all inventories are counted and there is no duplication of
count and no movement of inventory during the count;
(g) process of identifying slow-moving, damaged and/or obsolete

inventories.
(h) allocation of inventory floor or shelves and pre-numbered
count sheets to count team;
(i) inventories are counted by teams of two (one counting and
one checking and recording) and at least one of the team
members is not responsible for the storing and recording of
inventories; and
(j) return of used and unused count sheets.

2 When physical inventory count instruction is not available,
prepare the stock count memo detailing the process of the count
obtained through discussion with the management. Ensure the
key information is included in the memo.
3 For locations not covered by the count, enquire if there are any
alternative methods used to verify their existence. In the event
where the inventory balance in such location is likely to be
material, request the client to perform the count unless it is
impracticable to do so. Evaluate the reasons for not performing
the count and consider its impact on audit of inventory balances.
4 Enquire and document if any of the inventories are held by the

client on behalf of a third party, for example on consignment, and
check that:
(a) such items are excluded from the inventory list;

(b) such items are clearly separated from the physical inventories
and are counted and segregated on inventories sheets; and
(c) where material, obtain confirmations from the third parties.

Results
satisfactory
5 For inventories not counted but material (e.g. held by third party
warehouse, overseas, on consignment, etc.), request for
management to prepare the confirmation request to confirm the
inventory balances as of the end of the reporting period detailing
the type of inventories, quantity, unit price, total value, conditions,
etc. The confirmations should be sent and received by the
auditors.
6 For inventories selected for test count, pre-select test count items
based on preliminary inventory listing (for overstatement test)
obtained from client by reference to the prior year working papers
and discussions with management.
Generally, if the client has reasonably reliable perpetual
inventory records and if the quantifies are expected to be stable
to the date of actual physical counts, consider selecting the items
of test counts from the most recent perpetual records.
The best practice to is to discuss and agree on the method of
selection of inventories for test count (finished good, WIP and/or
raw material) with the manager and partner in charge, in
particular when the inventory balances are material in terms of
value or risk.
Document the basis of selection and calculation of sample size
based on the risk factor.
B. On the date of physical inventory count – observation of management’s count procedures

1 Observe the physical inventory count performed by client and
evaluate client's instructions and procedures for recording and
controlling the results of the physical inventory count. Observe
the performance of client’s count procedures, and check that:
(a) adequate physical inventory count instruction has been

issued to client’s staff in charge of the inventory count and
whether they been adequately briefed on their responsibilities;
(b) client officer involved in supervision of inventory count is

competent and aware of their responsibilities;
(c) client officer is independent of the physical inventory control
function;
(d) there are physical access control over the inventory to enable
proper counting and completeness;
(e) when the weighing machine or other measurement equipment

is used, ascertain if the equipment is reliable to provide accurate
count;
(f) when the inventory quantity is determined based on

estimation, review the basis of estimation and consider if
involvement of an expert is required;
(g) the procedures designed to ensure systematic counting of

inventory so that all inventories are counted and there is no
duplication of count and no movement of inventory during the
count;
(h) there is allocation of inventory floor or shelves and pre-

numbered count sheets to count team;
(i) inventories are counted by teams of two (one counting and
one checking and recording) and at least one of the team
members is not responsible for the storing and recording of
inventories;
Results
satisfactory
(j) used and unused count sheets are returned;
(k) the inventory held by the client on behalf of a third party is
properly labeled and separated from the client’s inventories and
are not counted/ or included in the inventory count sheet;
(l) the slow-moving, damaged and/or obsolete inventories

identified during the count are clearly marked on the inventory
count sheets and separated from the other inventories;
(m) the results of the inventory count have been properly

recorded in the inventory count sheets, and checked by relevant
client’s officer in charge of supervising the count and signed off;
and
(n) under perpetual inventory system, the physical inventory

counted should the same as the perpetual inventory records, any
differences noted during the inventory count are marked on the
inventory count sheet.
Any other protocols set out in the physical inventory count

instructions have been properly adhered to.
2 Document the results of auditor’s observation over
management’s physical inventory count in the observation
checklist.
C. Auditor’s test count
1 Obtain the inventory listing as at the date of count (usually period
end) used for physical inventory. This listing should be compared
and reconciled against the final inventory listing provided by the
management in the final audit.
2 Compare the inventory listing provided at the date of count

against the planning to consider if:
(a) there is any significant change to the type/nature of the
inventories and respective value thereof;
(b) evaluate if the significant change makes business rationale

and explainable for;
(c) there is any need to increase or reduce sample size based on
the latest inventory listing; and
(d) the pre-select inventory items for test count remains
appropriate and If not, reselect the inventory items for test count.
3 Perform the test count by tracing the selected inventory items to

the physical items (list to floor), count and agree the quantity in
the inventory listing.
4 Randomly select physical inventory items from the test count

location (floor to list) (understatement test), count and agree the
quantity to the inventory listing.
5 When a discrepancy is noted, enquire from the client’s staff in
charge of that location on the nature and likelihood that caused
the discrepancy. Differences between the client’s and the
auditor’s count quantities must be resolved during the count.
Document the reasons of the excess or shortage of inventory
items and mark on the inventory count sheet.
6 Where serially numbered inventory count sheets are used,

record the numbers of all sheets used at the end of the count.
Results
satisfactory
7 Request client’s staff to initial on the auditor’s inventory count
sheets to acknowledge the discrepancies and the quantity of
inventory counted.
D. Cut-off documents to be obtained during observation of physical inventories count

1 Obtain the copies or record the details of the cut-off documents
for each location:
(a) last Goods Delivery Note (GDN) in respect of finished goods;
(b) last material issue note or material transfer note in respect of

raw material and work in progress;
(c) last goods received note (GRN).
2 If client uses a reliable inventory system that enable key
inventory documents such as GDN, material issue note and GRN
to be pre-numbered (and cannot be used twice, any error will
cause the number to be void), obtain the last number and
relevant details for the purpose of performing inventories cut-off
procedures.
3 Trace to client’s inventories management system or inventory

movement listing to ensure that the goods delivered or materials
received are correctly recorded in the correct period.
VI. CONCLUSION Yes No N/A Comments

documented.
statements.
4 Misstatements identified (other than those deemed
to be clearly trivial) have been recorded in A5.
5 Sufficient appropriate evidence has been obtained If no, include in

to support the audit objectives. A4 and consider
the effect on
audit opinion in
A6
Date: Date:
Client: Ref:
Year end: G5
SAMPLE SELECTION PLANNING – INVENTORY

Approximate number of transactions in
a period/
Statement level
risk (C8) L 1.2 1.4 1.6
M 1.4 1.8 2.1
H 1.6 2.1 2.5
Assertions:
Existence (E), Rights & Obligations (R&O), Completeness (C), Valuation (V), E R&O C V P&D
Classification, Presentation and Disclosure (P&D)





L M H
OR

(table figure)


Assertions:
E R&O C V P&D
Existence (E), Rights & Obligations (R&O), Completeness (C), Valuation (V),
CONCLUSION
I am satisfied that the actual sample size computed will be sufficient to enable us to draw conclusions over the population for the assertion identified.

Client: Ref:
Year end: I
I PROPERTY, PLANT AND EQUIPMENT

I1 Lead schedule
I2 Audit programme – Property, plant and equipment
I3 List of property, plant and equipment
I4 Opening balance test
Sample selection planning – Property, plant and
I5
equipment
I6 Additions and disposals
I7 Depreciation reasonableness test
Evaluation of management’s assessment of asset
I8
impairment
Client: Ref:
Year end: I2
AUDIT PROGRAMME – PROPERTY, PLANT AND EQUIPMENT
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish items of property, plant and equipment recorded in the general ledger exist at the end of
the reporting period. E
2 To establish items of property, plant and equipment and/or expenditure at the end of the reporting
period meet the recognition criteria are correctly recorded in the fixed assets register and general C
ledger.
3 To establish property, plant and equipment acquired in foreign currencies are translated at the
4 To establish adequate allowances are made for impairment and depreciation where applicable.
V
5 To establish the entity owns, or has legal rights to, the property, plant and equipment recorded in the
general ledger at the end of the reporting period. All property, plant and equipment are free of
restrictions on use, liens, or other security interests or, if not, such restrictions, liens, or other security
R&O
interests are identified and disclosed in the financial statements.
6 To establish all necessary disclosures concerning property, plant and equipment are accurately
made and that the information is appropriately presented and described in the financial statements. P&D


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
1 Step B
• Are there property, plant and equipment pledged to banks and/or other parties?
• Are there property, plant and equipment not in use/idle/damaged?
• Is the auditor unable to obtain external confirmations for property, plant and equipment held by third parties?
• Are there any property, plant and equipment held outside the country?
Yes No Comments
2 Step C
• Are there significant additions and/or disposals during the period?
• Are there foreign currency denominated additions or disposals during the period?
• Is the revaluation model applied on certain classes of the assets?
• Are there asset-related government grants received during the period?
• Are there any exchanges of assets during the period?
3 Step D
• Are there significant fully depreciated assets still in use by the entity?
• Are the useful lives excessive or inadequate based on prior experience?
4 Step E
• Are there any leasehold land and building that require separate classification of lease?
5 Step F
• Are there significant fully depreciated assets still in use by the entity?
• Are there any indications that assets may be impaired based on our understanding of the entity’s business
environment?
6 Step G
• Are there property, plant and equipment pledged to banks and/or other parties?

Date: Date:
AUDIT PROGRAMME – PROPERTY, PLANT AND EQUIPMENT
Results
WP ref (Y/N) date
A. General
Obtain schedule of property, plant and equipment and agree to general ledger
(B5) and prior period’s audited trial balance with details of the
additions, disposals, write-offs, transfers, depreciation, accumulated
depreciation and impairment losses where applicable. Agree the
opening balances to prior period’s financial statements and check
arithmetic accuracy of the lead schedule.
2 Obtain list of additions during the period, if any, with details of the
assets purchased and its class of assets, date of purchase, cost
price, etc. Agree additions to fixed assets register and lead schedule.
3 Obtain list of disposals/write-off during the period, if any, with details

of the items disposed, cost, accumulated depreciation and net book
value at the date of disposal. If the item was sold, include the
proceeds received and calculation of gain or loss on disposal. Agree
disposals to fixed asset register and lead schedule.

(a) comparison of current period’s balances with that of prior period
by analysing the current period’s additions and/or disposals,
depreciation and impairment losses against the client’s business and
operations; and
(b) review for items above performance materiality, or those which

analytical procedures that would cause the property, plant and
equipment balances to be materially misstated.
Physical sighting and test of ownership of assets

1 Determine the sample size of current and prior period’s additions.
Perform sighting of the assets selected and assess whether:
(a) the assets are used and/or owned by the entity;

(b) the remaining useful life appears reasonable in the relation to the
condition and estimated future use; and
(c) the assets are in good working condition and not idle.
2 Confirm ownership of property, plant and equipment by:
(a) inspecting title deeds to all properties;
(b) performing land search for properties situated both locally or
overseas;
(c) in respect of material assets under finance lease (Ref. Section O
– Borrowings and Finance Lease), inspect lease agreement or obtain
confirmation from banks or other custodians of the property, plant
and equipment; and
(d) inspecting the motor vehicle registration documents for motor

vehicles owned by the Company with significant carrying amounts at
the end of the reporting period.
Results
C. Additions, disposals and completeness tests WP ref (Y/N) date
1 For the samples selected from the additions during the period, vouch
to supporting documents (including capital expenditure approvals,
budgets, suppliers’ invoices, etc.). Check that:
(a) cost recorded includes only costs that meets the recognition
criteria of property, plant and equipment;
(b) cost denominated in foreign currencies are translated at the
appropriate entity’s spot rates;
(c) they have been properly authorised;
(d) they are recorded in the correct class of assets;
(e) assets acquired are delivered before the end of the reporting
period; and
(f) assets acquired under finance leases are accounted for in
accordance with applicable accounting standards.
2 For significant disposals during the period, vouch to supporting
documents (including sale and purchase agreement, authorisation
for disposals, proof of receipt, etc.). Check that:
(a) sales proceeds have been correctly accounted for;

(b) enquire and document whether any items have been scrapped or
destroyed and check that appropriate records have been kept;
(c) gain or loss on disposals has been correctly calculated and

recorded;
(d) disposals denominated in foreign currency exchange rates are
translated at the appropriate spot rates;
(e) they have been properly authorised; and
(f) they have been removed from the fixed assets register.
3 Check the completeness of property, plant and equipment by:
(a) reviewing repair and maintenance accounts to determine whether

any item should be reclassified as property, plant and equipment;
(b) reviewing board minutes (Ref. Section D5.2) for any approval of
purchase of property, plant and equipment during the period; and
(c) performing search for unrecorded liabilities (Ref. Section N –

Trade, Bills and Other Payables).
4 Where the property, plant and equipment is stated at revalued

amount, perform relevant procedures listed in I2Sup.
5 Where government grant is used to offset the cost of assets, perform

relevant procedures listed in I2Sup.
6 Where there is an exchange of assets, perform relevant procedures
listed in I2Sup.
D. Depreciation test
1 In respect of the depreciation charge,
(a) compare bases and rates of depreciation used by the entity
against other companies within the same industry and determine if
the bases and rates appear to be unreasonable that require further
assessment;
(b) check if rates have been considered for each significant part of
the assets based on different useful lives, rate of consumption and
separability etc.;
(c) review the methods applied and consider whether they are
appropriate to the pattern of consumption of the assets;
Results
WP ref (Y/N) date
(d) confirm all assets (including idle assets) are being depreciated in
accordance with the entity’s accounting policy;
(e) check reasonableness of depreciation charge for the period;
(f) review residual values and useful lives at least at the end of each
reporting period and consider if adjustment to the rates is required;
and
(g) ensure assets are depreciated at cost less residual value.
E. Leasehold land and building

1 When a lease includes both land and building elements, consider if
the land and building components should be separately classified
based on the assessment of whether substantially all the risks and
rewards incidental to ownership of each element have been
transferred to the entity.
(a) If both elements are operating leases, the entire lease is

classified as operating leases.
(b) If not, the minimum lease payments (including any lump-sum
upfront payments) are allocated between the land and the building
elements in proportion to the relative fair values of the leasehold
interests in the land and building element of the lease at the
inception of the lease.
F. Impairment review
1 Consider and document whether there are any indications of
impairment which might adversely affect the value of the assets:
(a) Assess external source of information such as:

(i) indications of whether assets value has declined;
(ii) technological changes with an adverse impact;
(iii) increase in market interest rate or return of investments; or
(iv) the carrying amount of the net assets of the entity is more than its
market capitalisation
(b) Assess internal source of information such as:
(i) evidence of physical damage of the assets;
(ii) significant changes with an adverse effect on the entity; or
(iii) evidence that the asset will perform worse than expected.
2 Conclude our assessment on impairment of property, plant and

equipment. In the event of management’s disagreement, consider to
bring the matter for discussion with those charged with governance.

1 Establish the property, plant and equipment are properly disclosed in
the financial statements in accordance with FRSs.

and disclosure.

identified in C9.
documented.
appropriate.

statements.

consider the
impact on the
remaining
audit work as
well as work
done to-date.

consider the
effect on audit
opinion in A6
Date: Date:
SUPPLEMENTARY PROCEDURES – PROPERY, PLANT AND EQUIPMENT
Results
WP ref (Y/N) date
A. Revaluation model
1 Where a class of property, plant and equipment is stated at revalued
amount, confirm that:
(a) supporting documents exist for the valuations such as a valuation
report or management's estimates; check that sufficient appropriate
audit evidence is obtained and documented in C4, C5 and PAF1.1 in
relation to accounting estimates of fair values;
(b) the revaluation is consistently applied to all assets in that class;
(c) any increase in the carrying amount as a result of a revaluation

shall be recorded in other comprehensive income and accumulated
in equity under the heading of revaluation surplus. However, the
increase shall be recognised in profit or loss to the extent that it
reverses a revaluation decrease of the same asset previously
recognised in profit or loss;
(d) any decrease in the carrying amount as a result of a revaluation

shall be debited first against any previous revaluation surplus to the
extent of the credit balance existing in the revaluation surplus, after
which any excess are recognised in profit or loss; and
(e) where a revalued asset is disposed of, any revaluation surplus is

transferred to retained earnings and not made through profit or loss.
B. Government grant
1 Where government grant has been used to reduce the carrying
amount of property, plant and equipment during the period, check
that:
(a) the amount offset is correct based on the supporting documents

such as proof of receipt, grant documents, etc; and
(b) the grant is accounted for in accordance with FRS 20.

C. Exchange of assets
1 Where property, plant and equipment is acquired in exchange for a
non-monetary asset or assets, or a combination of monetary and
non-monetary assets, check that the cost of property, plant and
equipment is measured at fair value unless:
(a) the exchange transaction lacks commercial substance;

(b) the fair value of neither the asset received nor the asset given up
is reliably measurable; or
(c) the acquired item is not measured at fair value and its cost is
measured at the carrying amount of the asset given up.
Client: Ref:
Year end: I5
SAMPLE SELECTION PLANNING – PROPERTY, PLANT AND EQUIPMENT

Approximate number of transactions
in a period/
Statement level
risk (C8) L 1.2 1.4 1.6
M 1.4 1.8 2.1
H 1.6 2.1 2.5
Assertions:
Existence (E), Rights & Obligations (R&O), Completeness (C), Valuation (V), E R&O C V P&D





(Overall materiality ÷ Sampling risk

factor)
L M H
OR

(table figure)




factor)
Assertions:
E R&O C V P&D
CONCLUSION
I am satisfied that the actual sample size computed will be sufficient to enable us to draw conclusions over the population for the assertion
identified.

Client: Ref:
Year end: J
J INVESTMENT PROPERTY

J1 Lead schedule
J2 Audit programme – Investment Property
J3 List of investment properties
J4 Additions and disposals
J5 Test of cost / fair value of investment properties
J6 Depreciation reasonableness test
Evaluation of management’s assessment of asset
J7
impairment
J8 Valuation report
Client: Ref:
Year end: J2
AUDIT PROGRAMME – INVESTMENT PROPERTY
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish investment properties recorded in the general ledger exist at the end of the
reporting period. E
2 To establish investment properties at the end of the reporting period are correctly recorded
in the general ledger. C
3 To establish investment properties are correctly recorded at cost or fair value and that the
basis is acceptable. Investment properties acquired in foreign currencies are translated at V
the appropriate foreign currency exchange rates.
4 To establish adequate allowances are made for impairment and depreciation where
applicable. V
5 To establish the entity owns, or has legal rights to the investment properties recorded in the
general ledger at the end of the reporting period. All investment properties are free of
restrictions on use, liens, or other security interests or, if not, such restrictions, liens, or other
R&O
security interests are identified and disclosed in the financial statements.
6 To establish all necessary disclosures concerning investment properties are accurately

made and that the information is appropriately presented and described in the financial P&D
statements.


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
1 Step B
period?
• Are the title documents for the investment properties held by the entity?
2 Step C
period?
• Are there additions to investment properties during the period?
• Are there additions or disposals denominated in foreign currencies during the period?
• Are the investment properties used for long-term capital appreciation and/or leased out under operating
lease?
• Is fair value model used to measure the investment properties?
3 Step D
• Are there disposals or transfers to/from investment properties during the period?
• Are there additions or disposals denominated in foreign currencies during the period?
4 Step E
period?
• Are the useful lives excessive or inadequate based on prior experience?
Yes No Comments
5 Step F
• Are there indications that the investment properties may be impaired?
6 Step G
• Are there investment properties pledged to banks and/or other parties?

Date: Date:
AUDIT PROGRAMME – INVESTMENT PROPERTY
Results
satisfactory
A. General
Obtain schedule of investment property and agree to general ledger
balance (B5) and prior period’s audited trial balance with details
of the additions, disposals, transfers, depreciation, accumulated
depreciation and impairment losses where applicable. Agree the
opening balances to prior period’s financial statements and
check arithmetic accuracy of the lead schedule.
2 Obtain list of additions during the period, if any, with details of the
property purchased (and/or transferred), date of purchase
(and/or transfer), cost or accumulated depreciation, carrying
amount, etc. Agree additions to the lead schedule.
3 Obtain list of disposals during the period, if any, with details of

the items disposed (and/or transferred), cost, accumulated
depreciation and net book value at the date of disposal (and/or
transfer). If the item was sold, include the proceeds received and
calculation of gain or loss on disposal. Agree disposals to the
lead schedule.

(a) comparison of the current period balances with that of prior
period and corroborate with themanagement’s current period
business development;
(b) review and comparison of key ratios or other performance

indicators; and
(c) review for items above performance materiality, or those

performing analytical procedures that would cause the
investment property balances to be materially misstated.
B. Physical sighting and test of ownership of assets

1 Perform sighting of investment properties and observe whether
the property is held to earn rentals and/or capital appreciation.
2 Confirm ownership of investment property by:

(a) inspecting title deeds;
(b) performing land search for investment properties situated
both locally or overseas; and
(c) in respect of investment properties under finance lease (Ref.
Section O – Borrowings and Finance Lease), inspect lease
agreement or obtain confirmation from banks or other custodians
of the investment properties.
C. Initial recognition of investment property

1 Assess the appropriateness of reclassification of investment
properties made by the entity’s management. The following are
examples of investment properties:
(a) land held for long-term capital appreciation rather than for
short-term sale in the ordinary course of business; or
(b) a building owned by the entity (or held by the entity under a
finance lease) and leased out under one or more operating
leases.
Results
satisfactory
2 Check investment property is initially recognised at cost
(including costs directly attributable to the acquisition of the
investment property).
When investment property is subsequently recognised using fair
value model, perform relevant procedures in J2Sup.
3 Check cost is correctly recorded by:

(a) verifying supporting documents such as sale and purchase
agreement and proof of payment;
(b) assessing the nature and appropriateness of the directly
attributable costs that was included in the investment property;
(c) ensuring the cost denominated in foreign currencies are

translated at the appropriate entity’s spot rates;
(d) ensuring they have been properly authorised;
(e) correctly classifying them;
(f) confirming they are capital and not revenue in nature;
(g) correctly computing the value which represents the
capitalisation of items made internally; and
(h) ensuring assets acquired are delivered before the end of the
reporting period.
D. Transfers/disposals
1 When there is a transfer to/from investment property during the
period,
(a) check there is a change in use that have triggered the
transfer; and
(b) assess the appropriateness of the reclassification of assets
after the transfer.
2 When an entity uses the cost model, check the carrying amounts
of the investment property, owner-occupied property and
inventories, before and after the transfer, are correctly recorded.
3 In respect of disposal of investment property during the period,
(a) verify supporting documents such as sale and purchase

agreement and proof of receipt;
(b) ensure sales proceeds have been correctly accounted for;
(c) ensure the disposal denominated in foreign currencies are

translated at the appropriate entity’s spot rates;
(d) ensure gain or loss on disposal has been correctly calculated;
(e) ensure they have been properly authorised; and

(f) ensure they have been removed from the asset register/listing.
E. Depreciation (Cost model)

1 In respect to depreciation charge,
(a) compare bases and rates of depreciation used by the entity
against other companies within the same industry and determine
if the bases and rates appear to be unreasonable that require
further assessment;
(b) check if rates have been considered for each significant part
of the assets based on different useful lives, rate of consumption
and separability, etc.;
(c) review the methods applied and consider whether they are
appropriate to the pattern of consumption of the assets;
Results
satisfactory
(d) confirm all assets (including idle assets) are being
depreciated in accordance with the entity's accounting policy;
(e) check reasonableness of depreciation charge for the period;
(f) review residual values and useful lives at the end of the
reporting period and consider if adjustment to the rates is
required; and
(g) ensure assets are depreciated at the lower of cost or residual
value.
F. Impairment (Cost model)
1 Consider and document whether there are any indicators of
impairment which might adversely affect the value of the assets.
Check these are in accordance with the applicable FRSs.
2 Conclude our assessment on impairment of investment property.

In the event of management’s disagreement, consider to bring
the matter for discussion with those charged with governance.

1 Establish the investment property is properly disclosed in the
disclosure checklist relating to this account to ensure appropriate
presentation and disclosure.


documented.

statements.
Yes No N/A Comments
be revised in view of the audit evidence obtained. A4 and consider
the impact on the
remaining audit
work as well as
work done to-
date.

the effect on
audit opinion in
A6
Date: Date:
SUPPLEMENTARY PROCEDURES – INVESTMENT PROPERTY
Results
satisfactory
A Fair value model
1 Where investment property is stated at fair value,
(a) ensure all investment properties are measured at fair value;
(b) trace supporting documents such as valuation report or an

estimate of fair value using an income or depreciated
replacement cost approach;
Note: Where valuation report is used to support valuation, assess

the reliability of the report. Consider using the Audit Programme
on Using the Work of an Auditor’s Expert (App9).
(c) ensure any gain or loss arising from a change in fair value of
investment property is recognised in profit and loss statement in
the period in which it arises; and
(d) ensure sufficient appropriate evidence relating to the

accounting estimate of fair value has been obtained and
documented in C4, C5 and PAF1.
2 When the entity adopts fair value model in respect of its

investment property, the entity shall disclose the following:
(a) whether, and in what circumstances, property interests held
under operating leases are classified and accounted for as
investment property;
(b) when classification is difficult, the criteria it uses to distinguish

investment property from owner-occupied property and from
property held for sale in the ordinary course of business;
(c) fair value of investment property (as measured or disclosed in

the financial statements) is based on a valuation by an
independent valuer who holds a recognised and relevant
professional qualification and has recent experience in the
location and category of the investment property being valued. If
there has been no such valuation, that fact shall be disclosed;
(d) amounts recognised in profit or loss for:

(i) rental income from investment property;
(ii) direct operating expenses (including repairs and
maintenance) arising from investment property that generated
rental income during the period;
(iii) direct operating expenses (including repairs and

maintenance) arising from investment property that did not
generate rental income during the period; and
(iv) the cumulative change in fair value recognised in profit or

loss on a sale of investment property from a pool of assets in
which the cost model is used into a pool in which the fair value
model is used.
Results
satisfactory
(e) existence and amounts of restrictions on the realisability of
investment property or the remittance of income and proceeds of
disposal;
(f) contracted obligations to purchase, construct or develop

investment property or for repairs, maintenance or
enhancements; and
(g) a reconciliation between the carrying amounts of investment

property at the beginning and end of the reporting period,
showing the following:
(i) additions;
(ii) net gain or loss resulting from fair value adjustments;
(iii) transfers;
(iv) assets classified as held for sale or included in a disposal
group classified as held for sale in accordance with FRS 105 and
other disposals;
(v) net exchange differences arising from the translation of the
financial statements into a different presentation currency, and
on translation of a foreign operation into the presentation
currency of the reporting entity; and
(vi) to/from
B Transfer other changes.
investment property
1 For a transfer from investment property carried at fair value to

owner-occupied property or inventories, check the property’s
deemed cost for subsequent accounting in accordance with FRS
16 or FRS 2 shall be its fair value at the date of change in use.
2 For a transfer from an owner-occupied property to an investment

property that will be carried at fair value, an entity shall apply
FRS 16 up to the date of change in use. The entity shall treat any
difference at that date between the carrying amount of the
property in accordance with FRS 16 and its fair value in the same
way as a revaluation in accordance with FRS 16.
3 For a transfer from inventories to investment property that will be

carried at fair value, any difference between the fair value of the
property at that date and its previous carrying amount shall be
recognised in profit or loss.
Client: Ref:
Year end: K
K EQUITY INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND

ASSOCIATES

K1 Lead schedule
Audit programme – Equity Investments in Subsidiaries,
K2
Joint Ventures and Associates
K3 Inter-company balances/loans
K4 Copy of accounts
Client: Ref:
Year end: K2
AUDIT PROGRAMME – EQUITY INVESTMENTS IN SUBSIDIARIES, JOINT

VENTURES AND ASSOCIATES
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish the entity has legal title or rights of ownership to all investments in subsidiaries,
joint ventures and associates, and the investments are correctly accounted for. E, C, R&O
2 To establish inter-company balances at the end of the reporting period are correctly
recorded and properly classified. E, C
3 To establish investments in subsidiaries, joint ventures and associates are valued correctly,
with allowance made for any impairment. V
4 To establish adequate allowance for impairment on the inter-company receivables is made

for any irrecoverable balances. V
5 To establish all necessary disclosures concerning investments in subsidiaries, joint ventures
and associates are accurately made and that the information is appropriately presented and P&D
described in the financial statements.


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5
Yes No Comments
1 Step B
period?
• Are the investee’s financial records not accessible by the client?
2 Step C
period?
• Are the investments wholly-owned?
3 Step D
• Are there significant additions and/or disposals during the period?
4 Step E
• Are there any significant inter-company balances/loans?
5 Step F
• Any there any indications that the investments are impaired?
• Is the allowance for impairment of investments excessive or inadequate based on prior experience?
• Is there no systematic and verifiable basis by the management for assessing allowance for impairment?
6 Step G
• Are there any transactions resulting in adjustments to equity investments during the period?
• Are there any business combinations during the period?
7 Step H
• Are there any investments made in foreign currencies?
8 Step I
• Are there any investments pledged to banks and/or other parties?

Date: Date:
AUDIT PROGRAMME – EQUITY INVESTMENTS IN SUBSIDIARIES, JOINT
VENTURES AND ASSOCIATES
Results
WP ref (Y/N) date
A. General
Obtain breakdown of investments in subsidiaries, joint ventures and associates and agree to
general ledger
2 Obtain a list of investments in subsidiaries, joint ventures and
associates, detailing name of investee company, percentage of
ownership, changes during the period, if any.

(a) comparison of current period’s balances with that of prior
period and analysing the reasons for fluctuation;
indicators; and

investments to be materially misstated.
B. Test of ownership/existence
1 Test ownership by:
(a) Inspecting share certificates for evidence of ownership of
investments, check the percentage of ownership of entity’s
investment is correct; or
(b) obtaining direct confirmation from independent custodian; or
(c) Inspecting capital verification reports or any other legal/formal

document confirming the ownership and percentage of interest
held by entity.
C. Initial recognition of investments

1 In respect of investment in subsidiary, ascertain that the entity
has control over the investee as described in FRS110. Consider
reviewing the investment agreements, articles of association,
and understanding from client on how the entity exercises such
control.
2 In respect of investment in joint venture, ascertain that the entity

has joint control over the investee and has rights to the net
assets of the arrangement, rather than rights to its assets and
obligations for its liabilities. Consider reviewing the joint venture
agreements, articles of association, board minutes, etc.
3 In respect of investment in associate, ascertain that the entity

has significant influence in the investee. If the entity has 20% or
more of the voting power of the investee, it is presumed that the
entity has significant influence, unless it can be clearly
demonstrated that this is not the case. If the entity has less than
20% of the voting power of the investee, it is presumed that the
entity does not have significant influence, unless such influence
can be clearly demonstrated.
4 Ascertain an entity has accounted for its investments in
subsidiaries, joint ventures and associates in accordance with
applicable FRSs.
Results
WP ref (Y/N) date
D. Test of additions and disposals
1 In respect of additions during the period,
(a) vouch all additions to source documents such as share
certificates, share transfer agreements, certificate of
incorporation, etc.;
(b) trace to bank payment slips to verify the investment sums

paid, agree to detailed listing of investments and general ledger;
and
(c) check appropriate approvals for such additional investments

made (e.g. Directors’ resolutions or signed minutes).
2 In respect of disposals,
(a) vouch all disposals to source documents such as share
transfer agreements, cancelled share certificates, etc.;
(b) trace to bank in slips for sale of investments;
(c) review basis of recording gains or losses on partial disposals
or dilution of interests, to check the cost of the remaining
investments is appropriately accounted for; and
(d) check the gains or losses are properly recognised in the profit
or loss.
E. Inter-company balances
1 For material balances with investee companies,
(a) check all inter-company balances (receivables and payables)
agree to the respective accounts of the investee companies at
the period end; and
(b) obtain confirmation where there are any group companies or
associated undertakings audited by component auditors outside
the firm.
2 Consider the recoverability of receivables from subsidiaries, joint

ventures and associates at the reporting date, and assess if
adequate allowance for impairment has been made.
3 Assess whether there are any long-term receivables or loans

that, in substance, form part of the entity’s net investments in the
subsidiaries, joint ventures or associates, for which settlements
are neither planned nor likely to occur in the foreseeable future.
F. Impairment review
1 Consider whether there are any indicators of impairment, which
might adversely affect the value of the assets, and check that
these have been dealt with in accordance with applicable FRSs.
(a) Obtain a copy of the latest management or audited accounts

and review the key financial figures such as profit or loss for the
period, net asset positions, cash flow level. Generally, it is
inappropriate to use net tangible assets as basis to determine
whether there is impairment. Auditor should consider the
quantitative and qualitative factors relating to the investee
company as a whole;
(b) If there is an indication for impairment, obtain client’s

impairment assessment and evaluate the reasonableness of the
assessment; and
(c) Where applicable, obtain the market value of the quoted
investments at the end of the reporting period. The fact that the
market value falls below the net cost of investments may be an
indication of impairment.
Results
WP ref (Y/N) date
2 Conclude our assessment on impairment of investments. In the
event of management’s disagreement, consider to bring the
matter for discussion with those charged with governance.
G. Others
1 Review the accounting treatment of capital distributions, bonus
and rights issues.
2 For business combinations that occurred during the period,
please refer to FRS 103.
H. Foreign currencies
1 Establish all non-monetary assets are translated at appropriate
entity’s historical rates, and the inter-company balances
denominated in foreign currencies are translated at the
appropriate entity’s closing rates.
I. Presentation and disclosure

1 Establish the investments are properly disclosed in the financial


documented.

the letter of representation (A3) or letter of A3 or A8

statements.
6 Initial materiality and/or risk assessment need not If no, include

be revised in view of the audit evidence obtained. in A4 and
consider the
impact on
the
remaining
audit work
as well as
work done
to-date.
7 Sufficient appropriate evidence has been obtained If no, include
to support the audit objectives. in A4 and
consider the
effect on
audit opinion
in A6
Date: Date:
Client: Ref:
Year end: N
N TRADE, BILLS AND OTHER PAYABLES

N1 Lead schedule
N2 Audit programme - Trade and other payables
N3 List of trade and other payables
N4 Accruals and provisions
N5 Sample selection planning - Trade and other payables
N6 Summary of trade payables’ confirmation results
N7 Confirmation replies
N8 Confirmation requests
Client: Ref:
Year end: N2
AUDIT PROGRAMME – TRADE, BILLS AND OTHER PAYABLES
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish all liabilities recorded in the general ledger exist at the end of the reporting
period. E
2 To establish all liabilities for which an entity has obligations to pay at the end of the reporting
period are correctly recorded in the general ledger. C, R&O
3 To establish all other financial liabilities are stated at amortised cost. V

4 To establish liabilities denominated in foreign currencies are translated at the appropriate
foreign currency exchange rates. V
5 To establish all necessary disclosures concerning payables are accurately made and that


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
1 Step B
period?
• Are there significant related party balances?
• Are payables likely to be understated due to client’s improper or inadequate cut-off of procedures?
• Are there significant overdue balances?
2 Step C
period?
• Are client’s estimating procedures generally not reliable based on prior experience?
3 Step D
• Are there any interest-bearing or interest-free loans obtained from related parties or third parties?
4 Step E
• Are there material bills payable and other payables?
• Are client’s estimating procedures generally not reliable based on prior experience?
5 Step F
• Are there deferred income arising from government grants received?
6 Step G
7 Step H
• Are there any interest-bearing or interest-free loans obtained from related parties or third parties?
• Are there deferred income arising from government grants received?

Date: Date:
AUDIT PROGRAMME – TRADE, BILLS AND OTHER PAYABLES
Results
satisfactory
A. General
Obtain breakdown of trade and other payables and agree to general ledger
balance (B5) and prior period’s audited trial balance with details
of trade payables, bills payable, other payables, advance
receipts from customers and accruals.
2 Obtain detailed listing of trade payables (by suppliers) and agree

total to lead schedule.
3 Obtain detailed listing of all other payables and accruals, and
agree respective total to lead schedule. The listing should
indicate the balances due to related parties and/or third parties
indicating the nature of these balances.

period by analysing the level of trade payable balances against
the cost of sales during the period;
(b) review and comparison of key ratios such as creditors
payment period for current and prior periods;
(c) comparison of current period’s major suppliers with prior
period;
(d) comparison of items of other liabilities in the current and prior
period; and
(e) review for items above performance materiality, or those
performing analytical procedures that would cause the payable
balances to be materially misstated.
1 Determine the payable balances to be selected for sending
confirmations.
2 For trade payables, the confirmation procedures generally
(a) request the client to prepare the confirmation requests
including the details of suppliers (name, address, person in
charge), balances per client’s records at period end, and any
(b) check the balances agree to creditors’ listing at period end
other details which are important for audit purposes;
and details of the suppliers are correct;
(c) retain a copy of the confirmation request in the file; and
(d) send the confirmation requests to the suppliers under the
3 For other payables, the confirmation procedures generally
(a) request the client to prepare the confirmation requests
including the details of the parties (name, address, person in
charge), balances per client’s records at period end, and any
other details that are important for audit purposes;
(b) for loans payable to non-financial institutions, consider
including details such as principal amounts, interest rates (for
interest-bearing loans) or whether the loans are interest-free,
assets pledged, period of loans, etc.;
(c) check the balances agree to detailed listing and the general
ledger or any applicable client’s records and details of the parties
are correct;
(d) retain a copy of the confirmation request in the file; and

(e) send the confirmation requests to the parties under the
Results
satisfactory
4 In respect of each reply:
(a) record it in the confirmation control sheet;
(b) agree the balance to that shown in the client’s records;
(c) investigate any exceptions and review the reconciliations
provided by the entity;
(d) consider whether any of the exceptions is indicative of fraud
or other misstatement; and
(e) consider validating the source of replies if received in
electronic format (for example, fax or electronic mail).
5 For non-replies within a reasonable period, send a follow-up

request. Consider whether sufficient and appropriate evidence
can be obtained by performing alternative procedures for non-
replies, e.g., by verifying to relevant and appropriate supporting
documents.
C. Ascertain completeness of liabilities and search for unrecorded liabilities

1 Perform a search for unrecorded liabilities (consider setting a
threshold amount to be used in selecting the samples) as follows:
(a) reviewing payment vouchers issued after period end; if the

payments are made for goods or services received before period
end, ascertain that the transactions have been taken up as at
period end;
(b) review unpaid supplier invoices at the date of fieldwork to

check that transactions relating to the period under review have
been taken up as at period end.
2 To address the potential risk of understatement of liabilities,

consider performing the following procedures to check
completeness of liabilities:
(a) review purchase day book during the period and payments
supported with supplier invoices, after the period end to identify
main suppliers;
(b) in the event when the balances of these major suppliers in the
detailed creditors listing are significantly low or nil, evaluate and
obtain justification for such balances by reviewing the statements
of accounts with suppliers, review purchase ledgers, etc.;
(c) when the balance per statements of accounts differs from that
of the entity’s balance in the general ledger, obtain the
reconciliation explaining the differences, trace material
reconciling items to its supporting documents; and
(d) if a particular payable balance does not appear reasonable

after our review of available evidence, and that payable has not
been selected for confirmation procedure, consider performing
additional confirmation procedure.
3 Review minutes of directors’ meeting for any new purchase or

significant contracts being entered into during the period. Inquire
the progress of such purchase/ contracts to determine if any
material liability has been omitted.
Results
satisfactory
D. Interest free loans
1 Financial liabilities such as trade and other payables are initially
measured at fair value and subsequently measured at amortised
cost, using the effective interest method.
(a) Enquire for the repayment terms of the payables and
substantiate with our understanding of the relevant business
processes;
(b) In respect of the payables expected to be settled after one

year, check the fair value computations, including but are not
limited to the use of discount rates, the repayment terms and the
principal amounts;
(c) In respect of payables with related parties or immediate
holding companies, consider if the fair value adjustments are
part of equity; and
(d) Check the fair value adjustments are properly recorded and
accounted for.
E. Bills payable, other payables and accruals
1 In respect of bills payable,
(a) check if bills payable are issued within the credit limit of the
bank facilities granted by banks;
(b) check if the bills issued are supported by underlying purchase
transactions; and
(c) and agree the bills payable amount to the bank confirmation.
2 In respect of other payables, vouch any material other payables

to supporting documents and check that other payables are
carried at amortised cost.
3 In respect of accruals, obtain a list of accruals:
(a) test arithmetical accuracy;
(b) vouch material items to supporting documents such as
suppliers’ invoices received subsequent to period end, goods
received notes, etc.;
(c) review for completeness and reasonableness by comparing
with prior period’s list;
(d) review basis of calculation. Obtain audit evidence about the
general reliability of the client’s estimating procedures and
methods, including control activities. If necessary, check that the
computation method is in accordance with relevant legislation or
agreement;
(e) cross reference those direct confirmation responses from

banks, legal firms and others to identify and confirm accrual
charges; and
(f) consider whether differences between the actual results and
previous estimates have been quantified and that, where
necessary, appropriate adjustments or disclosures are made.
4 When the accruals are made based on client’s estimate of the

value of goods or services received before period end but
suppliers’ invoices are not received, assess the reasonableness
of the basis used by the client in deriving the estimates. If
material, consider to substantiate with external audit evidence,
such as confirmation from the suppliers, work of experts, etc.
Results
satisfactory
F. Deferred income
1 Review the basis for recognition of deferred income and check
that it is reasonable:
(a) vouch to supporting documents; and
(b) check it is valid, complete and has been correctly applied with
the applicable FRSs and consistent with prior period.
2 For deferred income, check the income has been properly

apportioned between the accounting periods.
Government grant received
3 When entity received government grant that is intended to
compensate the cost of an asset purchased or constructed or
expenditure, entity may present such grant as deferred income.
In this respect, consider to perform the following procedures:
(a) review the basis for recognition of the deferred income;

(b) vouch to supporting documents such as grant letter, bank-in
slips, agreements, etc.;
(c) evaluate the conditions attached to the grant and its impact to
the financial statements; and
(d) evaluate that the accounting for the government grant and
deferred income is consistent with the FRSs.
4 When the deferred income is recognised in profit or loss on
systematic basis over the useful life of the asset, check that:
(a) the basis used is consistent with the useful life of the relevant
assets;
(b) the income has been properly computed and recognised as
income in the current period profit or loss; and
(c) the balance at the end of the period represents the remaining
income to be recognised in the future periods and consistent with
the remaining useful life of the assets.
G. Foreign currencies
1 Confirm all monetary liabilities denominated in foreign currencies
are translated at the appropriate entity’s closing rates and all
non-monetary liabilities are translated at the appropriate entity’s
historical rates.
H. Presentation and disclosure

1 Establish the payables are properly disclosed in the financial

documented.

statements.

the impact on the
remaining audit
work as well as
work done to-
date.

the effect on
audit opinion in
A6
Date: Date:
Client:
Year end:
SAMPLE SELECTION PLANNING – TRADE, BILLS AND OTHER PAYABLES

Approximate number of transactions
in a period/
Statement level
risk (C8) L 1.2 1.4 1.6
M 1.4 1.8 2.1
H 1.6 2.1 2.5
Assertions:
Existence (E), Rights & Obligations (R&O), Completeness (C), Valuation (V), E R&O C







factor)
L M H
OR

(table figure)




factor)
Assertions:
E R&O C

CONCLUSION
I am satisfied that the actual sample size computed will be sufficient to enable us to draw conclusions over the population for the assertio

Ref:
N5
V P&D
Value
No. of samples
Value
No. of samples
V P&D
population for the assertion identified.
Client: Ref:
Year end: N6GT
SUMMARY OF TRADE PAYABLES’ CONFIRMATION RESULTS

As at

Total trade payables balances
Total balances confirmed (A)

Balances verified by supplier statement reconciliations (D)
Balances verified by alternative procedures (F)
Total (B+D+F)
Unverified balances (G=A-(B+D+F))
Conclusion:
Payables’ confirmation worksheet

A B C D E F G
Remaining
Alternative Unverified
Unconfirmed Balance verified by unaudited Balances verified
Balance procedures balances*
Supplier Balance balance supplier statement balance by alternative
confirmed undertaken on (E – F)
(A-B) reconciliation (C – D) procedures
column E items
S$ S$ S$ S$ S$ S$ S$
* If there are balances recorded in this column, the auditor is to assess the impact on the audit and take appropriate actions where necessary.
Client: Ref:
Year end: O
O BORROWINGS AND FINANCE LEASES

O1 Lead schedule
O2 Audit programme - Borrowings and Finance Leases
O3 Finance lease schedule
O4 Bank confirmation replies
O5 Bank confirmation requests
Client: Ref:
Year end: O2
AUDIT PROGRAMME – BORROWINGS AND FINANCE LEASES
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish all borrowings and finance leases exist at the end of the reporting period and
the entity has the obligation to settle these liabilities. E, R&O
2 To establish all borrowings and finance leases are correctly recorded and properly classified.
C, E, V
3 To establish borrowings and finance leases denominated in foreign currencies are translated
at the appropriate foreign currency exchange rates. V
4 To establish all necessary disclosures concerning borrowings and finance leases are
accurately made and that the information is appropriately presented and described in the P&D


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5
IV. AUDIT PROCEDURE DESIGN CONSIDERATIONS

Yes No Comments
1 Step B
period?
• Are there any credit facilities including but are not limited to loans, letter of credit, etc. granted to the entity?
• Are there significant movements in borrowings during the period?

• Are there any purchases which are settled by way of issuing bills payable?
2 Step C
period?
• Are there significant movements in borrowings during the period?
• Are there any purchases which are settled by way of issuing bills payables?
• Are there any indications that bills payable issued by the entity are not supported by underlying transactions?
• Are the borrowings secured by way of pledge of the entity’s assets?

3 Step D
• Are there any finance lease transactions entered with banks or other financial institutions?
4 Step E
5 Step F
• Are the borrowings secured by way of pledge of the entity’s assets?
Date: Date:
AUDIT PROGRAMME – BORROWINGS AND FINANCE LEASES
Results
satisfactory
A. General
Obtain breakdown of borrowings and finance leases and agree to general ledger
2 Obtain detailed listing of bank borrowings (including bills
payables and overdrafts) with information on lenders (banks),
period of loans, principals, interest rates, repayments terms and
other key terms of the loan agreements. Agree total to lead
schedule.
3 Obtain finance lease amortisation schedule and agree the

present value of finance lease obligations to lead schedule
(including the current and non-current portions).

(a) comparison of the level of borrowings and finance lease
obligations as at current period end with that of prior period end,
and obtain understanding on the reasons for fluctuation in the
balances or changes in key bankers, etc.

indicators.
borrowings and finance lease payable balances to be materially
misstated.
1 Determine the items of borrowings and finance leases to be
selected for sending confirmations.
2 For selected items, obtain confirmations from banks and/or other
financial institutions to confirm balances as at the end of the
reporting period. The confirmation procedures generally include
the following steps:
(a) request client to prepare the confirmation requests;

(b) check the requests bear the authorisation with company
stamp and signatures corresponding to those required by their
account mandates;
(c) check the details of the lenders (name of lenders (e.g. banks),
address, department (person) in charge) against the entity’s
records;
(d) retain a copy of the confirmation requests in the file;

(e) send the confirmation requests to the lenders (e.g. banks)
under the engagement team’s control; and
(f) promptly follow up on non-replies by sending subsequent
requests.
3 In respect of each of the confirmation reply received:

(a) record in the confirmation worksheet;
(b) agree or request entity to reconcile the balances with those
shown in the entity’s records;
(c) investigate any exception(s) not consistent with the general
ledger/financial statements disclosures. The auditor should
request a revised confirmation reply and consider impact on
other areas of audit;
(d) consider whether any of the exceptions are indicative of fraud
or other misstatement; and
Results
satisfactory
(e) validate the source of replies if they were received in
electronic formats (for example: faxes or electronic mails), by
calling the lenders (e.g. banks) to verify if the same person
confirming the balances and if the confirmation process was
4 For non-replies
interfered by theon confirmation requests, request the entity to
client.
follow up with the banks.
C. Borrowings
1 In addition to confirmation procedures, consider to perform the
additional procedures as follows:
(a) for new loans obtained during the period, obtain the loan
agreements and agree the principal amounts, interest rates,
period of loans, assets pledged and other key terms to the
borrowing schedule prepared by client; trace to proof of loan
withdrawal such as bank statements, etc.;
(b) for loans repaid during the period, trace to payment vouchers
and check if the payments were made in accordance with the
loan agreements;
(c) obtain banking facilities letter to see if the bank facilities

(including bank overdrafts) are granted by bank and withdrawn
under the credit limit;
(d) review the loan agreements for any bank covenants; if any,
request for client to provide the computations/proof on how the
bank covenants are fulfilled; and
(e) check against the bank statements/ bank confirmation replies

from the banks.
D. Finance lease obligations
1 Obtain lease contracts from client, including new lease contracts
signed during the period. Agree key information of the finance
lease arrangements to the lease contracts, including the lease
period, residual value (if any), recurring payment amount, etc.
2 In respect of the amortisation schedules,

(a) test computation of implicit interest rates (effective borrowing
rates);
(b) test arithmetic accuracy of the amortisation schedules; and
(c) recompute the net present value of lease obligations at period

end and its classification as current or non-current liabilities.
3 Obtain confirmations from the lessors (lenders) to confirm the

details such as fair value of assets, lease periods, amount repaid
during the periods and/or lease payables at the end of the
reporting period.
E. Foreign currencies
1 Confirm all monetary liabilities denominated in foreign currencies
are translated at the appropriate entity’s closing rates.
F. Presentation and disclosure

1 Establish the borrowings and finance leases are properly
disclosed in the financial statements in accordance with FRSs.


documented.

statements.

the impact on the
remaining audit
work as well as
work done to-
date.

the effect on
audit opinion in
A6
Date: Date:
Client: Ref:
Year end: P
P CURRENT AND DEFERRED INCOME TAXES

P1 Lead schedule
P2 Audit programme - Current and Deferred Income Taxes
P3 Tax computations (current year and prior year)
P4 Reconciliation of tax charges
P5 Computations for deferred taxation
P6 Prior year assessments from tax authorities
P7 Correspondence with tax authorities
Client: Ref:
Year end: P2
AUDIT PROGRAMME – CURRENT AND DEFERRED INCOME TAXES
SUMMARY SHEET
I. AUDIT OBJECTIVES
Assertions
1 To establish the current tax liability is computed and accounted for in accordance with applicable tax
regulations and financial reporting standards respectively. E, R&O, C, V
2 To establish deferred tax is correctly accounted for. E, R&O, C, V

3 To establish deferred tax assets is recognised only to the extent that the assets will be realised in the
foreseeable future. V
4 To establish all necessary disclosures concerning current and deferred tax are accurately made and
that the information is appropriately presented and described in the financial statements. P&D


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
For risks identified in C8, perform the audit
procedures per C9.
1 Step B
• Are there significant matters currently outstanding with the tax authorities?
• Is the entity entitled to any corporate tax relief scheme with conditions attached to it?
• Are there significant foreign-sourced income not remitted to Singapore?
• Are there significant overseas taxes?
2 Step C
• Is the account balance significant (amount > PM) or expected to be significant at the end of reporting period?
• Are there temporary differences that give rise to deferred tax?

• Are there significant property, plant and equipment which the entity has claimed capital allowances but are not fully
depreciated?
3 Step D
• Are there any indications that the deferred tax assets recognised by the entity may not be realised?
4 Step E
• Are there any items n equity that have an impact on tax computation?
5 Step F
• Is the entity entitled to any corporate tax relief scheme with conditions attached to it?

Date: Date:
AUDIT PROGRAMME – CURRENT AND DEFERRED INCOME TAXES
Results
WP ref satisfactory Initial and date
Y/N
A. General
Obtain breakdown of current and deferred tax and agree to
general ledger
(B5) and prior period’s audited trial balance.
2 Obtain detailed schedule of current tax liability showing the opening

balance, provisions made, and payments during the period. Agree
the ending balance to lead schedule.
3 Obtain detailed schedule of deferred tax showing the balances of

unutilised tax losses and each type of temporary differences such as
those arising from accelerated tax depreciation, revaluation surplus,
etc. Agree the ending balance to lead schedule or general ledger.

(a) comparison of current period’s balances with that of prior period;

indicators; and
(c) review for items above performance materiality, or those which
analytical procedures that would cause the current and deferred tax
assets/liabilities to be materially misstated.
B. Current tax
1 For the schedule of current tax movement (both local tax and
overseas tax):
(a) test for arithmetical accuracy;
(b) check the amounts paid during the current period to bank
statements and copies of assessments and compare refunds
received to correspondences;
(c) agree the current tax liability to current tax computations; and
(d) review the current tax balances against any agreement of tax
computations with relevant tax authorities.
2 Obtain current tax computation and perform the following

procedures:
(a) check profit before tax used in the computation agrees to profit
and loss account;
(b) review the items of permanent differences (e.g.: non-deductible
expenses and non-taxable income) and temporary differences to
determine if the adjustments are made in accordance with relevant
tax regulations;
Results
Y/N
(c) obtain analyses of profit or loss items which may contain items
that are not deductible, or result in temporary or permanent
differences. Examples of these items are:
- travel/entertainment
- subscriptions
- sundries
- legal/professional fees
- repairs/maintenance (for capital items)
- hire charges (for expensive motor vehicles)
- payments under finance leases
- interest income and capital gains
- government grant income
(d) check calculation of capital allowances;
(e) verify the arithmetical accuracy of the computations; and
(f) review the allocation of the tax charge to income tax and other
taxes, if applicable.
3 Check the applicable tax provisions relating to the foreign-sourced

income are appropriately accounted for.
4 Review the current tax position including obtaining details of all open
years of assessment and significant matters currently outstanding
with the tax authorities, in order to assess potential over/under
provision of tax liability.
5 Consider if additional or write-back of previous provisions in respect

of the finalised years is required.
6 Check the current tax liability (asset) for the current and prior periods
been measured at the amount expected to be paid to (recovered
from) the tax authorities, using the tax rates (and tax laws) that have
been enacted or substantively enacted by the end of the reporting
period.
C. Deferred tax
1 Obtain analysis of deferred tax assets and liabilities, whichever
applicable, and consider whether temporary differences have been
appropriately accounted for.
Examples of temporary differences resulting in deferred tax assets or

liabilities are:
(a) differences arising from different depreciation rates between
accounting and tax purposes.
(b) assets carried at fair value, where such increase in fair value is
not taxable in the period of revaluation, but future recovery of the
carrying amount will result in taxable income.
(c) unused tax losses and unused tax credits to the extent that it is
probable that future taxable profits will be available against which the
unused tax losses and unused tax credits can be utilised.
2 Obtain deferred tax computation and perform the following

procedures:
(a) agree book values and tax bases of the assets or liabilities to
relevant schedules;
(b) cross-check to current tax computation to check for any omission
of temporary differences; and
(c) verify the arithmetical accuracy of the computations.
Results
Y/N
3 Check the deferred tax assets and liabilities have been measured at
the tax rates that are expected to apply to the period where the asset
is realised or the liability is settled, based on tax rates (and tax laws)
that have been enacted or substantially enacted by the end of the
reporting period.
D. Deferred tax assets arising from unutilised tax losses

1 Deferred tax assets should be recognised when it is probable that
taxable profit will be available against which the deferred tax
amounts can be utilised. When an entity has a liability of tax losses,
the entity recognises a deferred tax asset only to the extent that the
entity has sufficient taxable temporary differences or there is
convincing evidence that sufficient taxable profits will be available.
Review client’s assessment and estimates and ascertain whether the

deferred tax asset recognised is reasonable.
2 In respect of unused tax losses and tax credits, check tax

assessments or correspondences with the tax authorities.
3 Obtain client’s reassessment of unrecognised deferred tax assets

and review if the assessment remains appropriate.
E. Equity
1 Check the appropriateness of the accounting treatment in respect of
current tax and deferred tax that have been charged or credited
directly to equity (e.g. surplus from revaluation of assets) during the
period.

1 Establish current and deferred taxes are properly disclosed in the
and disclosure.

V. CONCLUSION
Yes No NA Comments
identified in C9.
findings and results obtained have been adequately
documented.

appropriate.

statements.
Yes No NA Comments

consider the
impact on the
remaining audit
work as well as
work done to-
date.

consider the
effect on audit
opinion in A6.
Date: Date:
Client: Ref:
Year end: R
R SHARE CAPITAL AND RESERVES

R1 Lead schedule
R2 Audit programme – Share Capital and Reserves
Client: Ref:
Year end: R2
AUDIT PROGRAMME – SHARE CAPITAL AND RESERVES
SUMMARY SHEET
I. AUDIT OBJECTIVES
Assertions
1 To establish any changes in share capital and reserves are supported by appropriate
resolutions and are properly accounted for. C, E, V, R&O
2 To establish obligations to pay dividends at end of the reporting period are properly
recorded. C
3 To establish all necessary disclosures concerning reserves and other statutory

information are accurately made and that the information is appropriately presented and P&D
II.
ASSERTION LEVEL RISK AND SECTION PERFORMANCE MATERIALITY


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
procedures per C9.
1 Step B
• Are there any dividends proposed, declared or paid out during the current period?
2 Step C
• Is there any movement in share capital?
• Are there any capital contributions made in foreign currencies?
3 Step D
• Are there significant transactions resulting in adjustments to equity items during the period?
4 Step E
• Is there any change to the ultimate controlling party?
5 Step F
• Are there any capital contributions made in foreign currencies?
6 Step G
• Are there significant transactions resulting in adjustments to equity items during the period?
• Is there any movement in share capital?
• Is there any change to the ultimate controlling party?
objectives.
Date: Date:
AUDIT PROGRAMME – SHARE CAPITAL AND RESERVES
Results
Y/N
A. General
Obtain breakdown and agree to general ledger
2 Obtain the detailed listing showing movements of share

capital and reserves during the period. Agree the ending
balance to lead schedule.

period;
indicators; and
B. Dividends
1 Where a dividend is proposed or has been paid in the period,
consider whether the distribution is properly authorised and
paid out of profits.
(a) check calculation and trace to payment records for cash

dividend; and
(b) check that proper amount has been transferred from
retained profits to the share capital accounts for stock
dividend.
2 Where a dividend is proposed or has been paid in the period,

consider whether the distribution is made in accordance with
the entity’s M&A and Companies Act.
3 Where a dividend is paid but in fact not allowed by

Companies Act, consider whether:
(a) this is adequately disclosed in the financial statements;
and
(b) a debtor or contingent asset should be shown.

4 Check that the proposed dividend or dividend paid has been
properly accounted and debited directly to equity.
C. Share capital
1 For the schedule of share capital movement:
(a) test for arithmetical accuracy;
(b) trace additions of share capital to Register of Members,
investment agreements, shareholders’ resolution and/or
evidence of capital receipt as the result of the increase;
(c) check whether the increase in share capital is within the

authorised share capital stated in Memorandum of
Association, if not, whether the increase in authorised share
capital has been carried out and completed before period
end;
Results
Y/N
(d) trace the amounts and value of capital redemption, where
applicable, to shareholders’ resolutions, cash disbursements
and other supporting records; and
(e) for other adjustments to share capital, obtain and review

supporting documents and assess if the adjustments are
appropriate and in accordance with FRSs and Companies’
Act.
2 Where there have been changes in the Register of Members,

check that they are duly authorised and executed and
changes have been properly reflected in the general ledger.
D. Other movements in equity and reserves

1 Determine if any events or transactions occurring during the
period has any impact on the equity or reserves of the entity.
This may include:

(a) share options vested and/or exercised;
(b) rights issued;
(c) share split;
(d) preference share issued; and
(e) fair value adjustments related to receivables or payables
balances with related companies.
2 Verify the movements in reserves to supporting documents
and/or workings.
3 When there is a transfer between reserves, check if the
accounting treatment is appropriate and in accordance with
the relevant FRSs.
4 For capital instruments issued in the period, check if these

instruments (or their components) been classified on initial
recognition as a financial liability, a financial asset or an
equity instrument in accordance with the substance of the
contractual arrangement and the definitions of a financial
liability, a financial asset and an equity instrument
5 When the entity has a share-based payments scheme, refer

to the supplementary programme in App5 – Share-Based
Payment.
E. Control
1 Ascertain details of the ultimate controlling party and check
correct disclosure is made in the financial statements
F. Foreign currencies
1 Confirm all capital contributions denominated in foreign
currencies are translated at appropriate entity’s historical
rates.
Results
Y/N
1 Establish share capital and reserves are properly disclosed
in the financial statements in accordance with FRSs.


V. CONCLUSION
Yes No NA Comments
documented.
3 There are no additional comments to be If no, amend A3

included in the letter of representation (A3) or or A8
letter of comment (A8). Where applicable, the accordingly.
planned extent of reliance on internal controls in
this area remains appropriate.

statements.

in A5.
6 Initial materiality and/or risk assessment need If no, include in

not be revised in view of the audit evidence A4 and consider
obtained. the impact on
the remaining
audit work as
well as work
done to-date.

obtained to support the audit objectives. A4 and consider
the effect on
audit opinion in
A6.
Date: Date:
Client: Ref:
Year end: S
S PROFIT OR LOSS – REVENUE AND COST OF SALES

S1 Lead schedule
S2 Audit programme – Profit or Loss – Revenue and Cost of Sales
S3 Audit work summary
S4 Detailed profit and loss schedules
S5 Sample selection planning – Profit or Loss – Revenue and Cost of
Sales
Client: Ref:
Year end: S2
AUDIT PROGRAMME – PROFIT OR LOSS – REVENUE AND COST OF SALES
SUMMARY SHEET
I. AUDIT OBJECTIVES
Assertions
1 To establish revenue relates to valid sales made or services rendered. O
2 To establish revenue from goods sold or services rendered is correctly recorded and C, A,
properly classified. Classification
3 To establish revenue amounts recorded in the general ledger exclude GST. A
4 To establish all credit notes and sales returns or rebates are correctly recorded. O, C, A
5 To establish sales cut-off is proper. Cut-off
6 To establish cost of sales match with the sales during the period. A
7 To establish purchases have occurred and are correctly recorded and properly classified. O, C, A,
Classification
8 To establish purchases cut-off is proper. Cut-off
9 To establish all necessary disclosures concerning revenue and cost of sales are accurately
statements.
Financial statements level risk per

L / M / H
C8
Assertions O C A Cut-off Classification P&D

Assertion level risk assessed per C8
(L/M/H)
Inherent Risk (IR) Factor (refer to
table below)

L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
procedures per C9.
1 Step B
period?
• Are there different types of revenue with different revenue recognition policies?
• Are there any arrangements with multiple performance obligations?
• Are significant estimates and judgement required in revenue recognition?
2 Step C
period?
• Are there significant related party transactions?
3 Step D
• Is there sufficient reliable information available for auditor to develop an expectation of the revenue amount
and compare to the recorded revenue amount?
4 Step E
• Are there significant cash transactions?
5 Step F
• Are significant cut-off errors expected to occur at the end of the reporting period?
6 Step G
• Are sales returns expected to be material?
7 Step H
period?
• Is there cost of sales reconciliation and gross profit margin analysis prepared by the client?
8 Step I
period?
9 Step J
• Are payables likely to be understated due to lack of or insufficient management’s cut-off procedures?
10 Step K
• Are significant estimates and judgement required in revenue recognition?

objectives.
Date: Date:
AUDIT PROGRAMME – PROFIT OR LOSS – REVENUE AND COST OF SALES
Results
Y/N
A. General
Obtain breakdown of revenue and cost of sales
balance (B5) and prior period’s audited trial balance with
details of revenue, cost of sales, sales tax and gross profit.
2 Obtain detailed listing and agree to lead schedule.

(a) comparison of the current period’s figures with that of prior
period;
indicators; and

revenue and cost of sales to be materially misstated.
B. Revenue recognition
1 Identify all material revenue streams such as:
(a) revenue from sales of goods (e.g. local or overseas, cash
or credit, sale to related parties, etc.);
(b) revenue from services rendered, (e.g. installation fee,
service fee, etc.); and
(c) other revenue such as interests, royalties and dividends
income.
2 Obtain understanding of the client’s business and its revenue

process, document the revenue process and perform a
walkthrough and/or test of operating effectiveness.
3 Determine whether the entity’s existing policies for revenue

recognition is appropriate and consistent with FRSs.
4 Enquire whether there were any changes in the entity's

revenue recognition policies from the prior period and assess
whether the changes are appropriate.
C. Test of details
1 Determine the sample size and basis for selection of items for
testing considering the level of audit risk and any risks
identified during planning.
2 Where pre-numbered invoices, sales orders, goods delivery

notes and credit notes are used, check the numerical
sequence and investigate missing items and determine
completeness.
3 To test occurrence:
(a) select samples from the general ledger and trace to sales
ledger;
(b) agree the amounts in sales ledger to sales invoices;
Results
Y/N
(c) check the information in the sales invoices to supporting
documents such as acknowledged goods delivery notes
and/or shipping documents, etc.;
(d) check the sale is approved and accounted for in the correct
period; and
(e) investigate any unusual delays between date of delivery
and the date of invoicing.
4 To test completeness:
(a) select samples such as acknowledged delivery notes or
sales orders fulfilled;
(b) vouch to the sales invoices and trace to sales ledger and
general ledger;
(c) check items are properly approved and accounted for in the
correct period based on the dates when risks and rewards are
transferred; and
(d) investigate any unusual delays between date of delivery

and the date of invoicing.
5 Check the revenue is not materially misstated by carrying out

procedures such as:
(a) request for direct confirmations on the sales transactions
occurred during the period from the customers;
(b) verify to subsequent receipts and corroborate with source

of receipts and inventory movements; and
(c) review material sales returns after period end and trace to
the supporting documents to understand why the sales are
returned, and its implication to sales recognised during the
period.
6 When amount of sales per sales listing is different from

general ledger, obtain a reconciliation of the sales per general
ledger to sales listing. Investigate the reconciling items:
(a) for material sales accrued, trace to the acknowledged

delivery notes or shipping documents to ascertain that sales
have taken place before period end;
(b) for other adjustments, review the journal entries, its

supporting documents and inquiry with entity’s personnel to
obtain understanding on the nature and rationale for posting
such adjustments.
D. Substantive analytical procedures

1 The application of planned analytical procedures is based on
the expectation that relationships exist among data such as:
(a) historical and current trend of sales and sales returns;

(b) historical and current cost of sales and gross profit margin;
(c) historical and current shipments and pricing;

(d) sales to key customers; and
(e) changes in business in the current period affecting sales
mix.
Results
Y/N
2 In performing the above procedures, auditors should consider
disaggregating the data (revenue, cost of sales and gross
profit) to build the expectations and the recorded sales
amounts at a level of detail that is sufficient to enable the
auditors to obtain the desired level of assurance based on a
comparison of the amounts by period (monthly, quarterly), by
product line or by location.
E. Cash sales
1 Determine the sample size and select samples of sales
receipts (printed on till rolls). Perform the following:
(a) check the additions for mathematical accuracy;
(b) check the pricings against an authorised price list;
(c) check the numerical sequence and investigate any missing
sales receipts;
(d) agree the details to the daily POS (Point of Sales) report;
(e) trace the total daily sales from the POS report to the
entity’s sales ledger or its equivalent to check for accuracy of
recording;
(f) vouch the amount from the daily POS report to bank-in slips
for cash sales, daily statements from credit card companies on
credit card sales and daily statements from NETS on collection
on behalf of the entity; and
(g) trace the cash sales amount from the sales ledger to the
general ledger to check that it is properly recorded.
F. Sales cut-off
1 To design appropriate procedures to test sales cut-off,
consider to perform the following procedures:
(a) obtain an understanding on management’s cut-off
procedures for the different categories of sales (such as local
or export sales, sales to third parties or related parties, etc.)
(b) obtain an understanding on the terms of sales and point of

transfer of risks and rewards of ownership of the goods to the
buyers;
(c) based on the understanding, determine appropriate tests

for cut-off and also consider if separate tests are required for
different categories of sales; and
(d) document test details including rationale for

separate/combined cut-off test, basis of sample size, source of
samples and procedures performed.
2 In respect of sales cut-off,

(a) select an appropriate sample of the goods delivered before
and after the period end;
(b) check goods delivered before the period end are excluded
from inventories and included in sales and trade receivables (if
unpaid);
(c) goods delivered after the period end are included in

inventories and excluded from sale and trade receivables; and
(d) document the test results.
Results
Y/N
3 If the entity does not maintain goods delivery notes or
recognise revenue based on delivery dates, specify the
relevant cut-off procedures to check that cut-off has been
correctly applied.
G. Sales returns
1 In respect of sales returns,
(a) select a sample of material sales returns recorded during
the period;
(b) trace to the credit notes and supporting correspondences
with the customers regarding the goods returned;
(c) check the quantities and descriptions on the credit notes to

the goods returned notes or other documentary proofs of
receipt of goods;
(d) check the details agree to the original invoice;

(e) check if a refund was issued to the customer; and
(f) consider the effect that any normal delay between receipt of
returned goods or customers' request for credit, and the
recording of the credit note may have on sales cut-off.
H. Cost of sales reconciliation

1 Obtain the cost of sales reconciliation, showing the movement
of opening and ending inventories, purchase and other
adjustments to cost of sales during the period.
2 Check and agree the items on cost of sales reconciliations to

other relevant schedules/working papers.
3 Enquire and assess the reasonableness of other adjustments
on the cost of sales reconciliation. Consider to test those items
by checking to the supporting documents.
I. Purchases
1 Determine the sample size and basis for selection of items for
testing considering the level of audit risk and any risks
identified during the planning stage.
(a) Select samples from the general ledger or debits to

inventory accounts, and agree to purchase ledger;
(b) Agree the amounts in purchase ledger to suppliers’
invoices;
(c) Check the description, incoterms, quantity and price details
of the suppliers’ invoices against goods received notes or bills
of lading and purchase orders, and other supporting records;
(d) trace to payments, if applicable; and

(e) consider whether there is adequate control over the
issuance of cheques/other form of payments.
Results
Y/N
J. Purchases cut-off
1 If the entity retains goods received records, check numerical
sequence of goods received notes and investigate missing
items and determine completeness. If the entity does not have
goods received records, specify the relevant cut-off
procedures to check that cut-off has been correctly applied.
2 In respect of purchases cut-off,

(a) select an appropriate sample of the goods received notes
before and after the period end;
(b) check goods received before the period end are included in
inventories, purchases and trade payables (if unpaid);
(c) check goods received after the period end are excluded
from inventories, purchases and trade payables, where
appropriate; and
(d) document the test results.
K. Presentation and disclosure

1 Establish the revenue and cost of sales are properly disclosed

V. CONCLUSION
Yes No NA Comments
documented.


statements.

in A5.

the impact on
the remaining
audit work as
well as work
done to-date.
Yes No NA Comments
the effect on
audit opinion in
A6.
Date: Date:
Client:
Year end:
SAMPLE SELECTION PLANNING – Profit OR Loss – Revenue and Cost of Sales

Assertion level risk (C8) Approximate number of transactio
L M H within the account bala

Financial Statement
level risk (C8) L 1.2 1.4 1.6
M 1.4 1.8 2.1
H 1.6 2.1 2.5

Assertions:
Occurrence (O), Completeness (CO), Accuracy (A), Cut-off (CU), Classification O CO A
(CL), Presentation and Disclosure (P&D)
Controls Reliance Strategy L M


(table figure)

No. of samples
Sample size for residual population

Substantive Strategy L M
OR

(table figure)

No. of samples

Assertions:
Occurrence (O), Completeness (CO), Accuracy (A), Cut-off (CU), Classification O CO A

(CL), Presentation and Disclosure (P&D)

conclusion
I am satisfied that the actual sample size computed will be sufficient to enable us to draw conclusions over the population for the assertion ide
Date: Date:
Ref:
S5
roximate number of transactions in a period/
within the account balance:
CU CL P&D
M H
Value
No. of samples
M H
Value
No. of samples
CU CL P&D
opulation for the assertion identified.
Client: Ref:
Year end: T
T PROFIT OR LOSS – OPERATING EXPENSES AND OTHERS

T1 Lead schedule
T2 Audit programme – Profit or Loss – Operating Expenses and Others
T3 Audit work summary

T4 Detailed profit and loss schedules
T5 Sample Selection Planning – Profit or Loss – Operating Expenses
and Others
Client: Ref:
Year end: T2
AUDIT PROGRAMME – PROFIT OR LOSS – OPERATING EXPENSES AND OTHERS
SUMMARY SHEET
I. AUDIT OBJECTIVES
Assertions
1 To establish operating and other expenses (include payroll expenses) are authorised, correctly recorded O, C, Cut-off,
and properly classified. A,
Classification
2 To establish operating and other expenses do not include transactions that have not occurred and payroll
expenses do not include salary payments to fictitious or terminated employees. O, A
3 To establish expenses incurred but not paid are properly accrued at the end of the reporting period.
C
4 To establish other gains or losses and other income items are correctly recorded and properly classified. O, C, A,
Classification
5 To establish all necessary disclosures concerning the profit and loss account are accurately made and that
Financial statements level risk per

L / M / H
C8

(L/M/H)
table below)

L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
For risks identified in C8, perform the audit procedures per
C9.
1 Step B
• Are the fluctuations of operating expenses consistent with the business development during the period?
2 Step C
• Are wages and salaries material in relation to the total operating expenses?
• Is the entity paying any emoluments to directors?
• Are there share-based payment transactions?
• Is there a defined benefit plan?
Yes No Comments
3 Step D
• Are other income/expenses such as gain or loss from disposal of property, plant and equipment expected to be
significant?
4 Step E
• Are other income/expenses such as gain or loss from disposal of property, plant and equipment expected to be
significant?

Date: Date:
AUDIT PROGRAMME – PROFIT AND LOSS – OPERATING EXPENSES AND OTHERS
Results
Initial and
WP ref satisfactory
date
Y/N
A. General
Obtain breakdown of profit or loss items and agree to general ledger
1 Prepare a lead schedule based on the current period’s trial balance (B5)
and prior period’s audited trial balance with details of administrative,
marketing and other expenses (depending on the choice of presentation of
expenses by entity), other income and expenses.
2 For each item, obtain detailed schedules and agree to lead schedule.

(a) comparison of the current period’s figures with that of prior period;
(b) review and comparison of key ratios or other performance indicators;

and
(c) review for items above performance materiality, or those which are
otherwise unusual.

analytical procedures that would cause the operating expenses and other
profit or loss items to be materially misstated.
B. Operating expenses
1 Compare expenses recorded to prior period’s amounts, budgets and
expectations, and corroborate with explanations received from client.
2 Other than operating expenses that are tested separately such as salaries
and wages, depreciation expense, rental expenses, etc., consider
performing the following procedures in respect of other material operating
expenses:
(a) selecting samples from the general ledger and trace to the invoices
and bank payment slips;
(b) check the expenses are properly authorised by the designated
personnel;
(c) check the expenses are properly classified;
(d) check the expenses are correctly recorded in the correct period; and
(e) consider whether there is adequate control over the issuance of

cheques.
Results
Initial and
WP ref satisfactory
date
Y/N
C. Wages and salaries
1 In respect of payroll testing, the source of samples selection can be either
tracing from debit balances of payroll ledger to payroll register, or tracing
from payroll register to amounts recorded in payroll ledger.
Consider performing the following procedures:

(a) obtain reconciliation for the difference between the amounts on the
payroll register to payroll ledger;
(b) obtain explanation for material differences and verify to supporting
evidence;
(c) check arithmetic accuracy of payroll record; and
(d) check the posting of various payroll items such as gross salaries, CPF
contributions, deductions or additions, etc. to the general ledger.
2 In respect of test of details on payroll expenses, consider performing the

following procedures:
(a) select a sample of employees from the payroll register documents (e.g.
employment contracts, time cards, employer’s return). Consider verifying
the physical existence of the employees;
(b) select a sample of employees from the employment contracts kept by

HR and verify to list of employees to check completeness;
(c) obtain details of emoluments including benefits-in-kind paid or payable

to key management personnel and verify to employment contacts or salary
slips; and
(d) check the payroll is approved by an authorised personnel.
3 Inquire into unclaimed wages and verify the explanations.
4 Where payments to casual workers are significant, check the validity and
authority of such payments (e.g. approved time cards, wage rate and
overtime payments).
5 In respect of remuneration paid to directors,

(a) verify whether the directors’ remuneration including benefits-in-kind
and interest in contracts are properly stated in the financial statements by
reference to:
(i) Service contracts

(ii) Board minutes
(iii) Employment contracts
(b) obtain confirmation of remuneration from each director and key
management personnel to check completeness.
6 If the entity has a defined benefit plan, refer to the supplementary

programme (App4) – Defined Benefit Plan.
7 If the entity has a share-based payment scheme, refer to the

supplementary programme (App5) – Share-Based Payment.
Results
Initial and
WP ref satisfactory
date
Y/N
D. Other income and other gains or losses
1 In respect of interest income,
(a) perform test of detail by vouching to the actual receipt of the interest
income; or
(b) perform reasonableness test by setting an expectation of the total
interest income for the period using the bank deposits balances and
interest rate.
2 For rental income, obtain tenancy agreements and develop an expectation

of the amount of rental income for the period and compare against the
amount in the general ledger.
3 In respect of government grants,

(a) when the grant becomes receivable by the entity to compensate the
costs that have been incurred, as the result the entity has no further
obligation, such grant should be recognised in profit or loss. In this case,
check the grant documents and evaluate the appropriateness of the
accounting treatment.
(b) the grants shall be recognised in profit or loss on a systematic basis

over the periods in which the entity recognises as expenses for the related
costs for which the grants are intended to compensate. In this case,
consider performing the following procedures:
(i) trace to the grant documents to evaluate the appropriateness of the

accounting treatment; and
(ii) trace to the amortisation schedule to ensure the amount of grant
recognised in the current period is correctly computed.
4 In respect of dividend income, consider performing the following

procedures:
(a) check the dividend income is recognised only when its rights to receive
has been established; and
(b) test dividend income received and accrued by reference to supporting

documents and other appropriate source.
5 In respect of other gains and losses, consider performing the following

procedures:
(a) check and make reference of gains or loss on disposal of items of
property, plant and equipment to the disposal schedule/working paper;
(b) check and make reference of any write down of inventories or

impairment losses to relevant working papers and assess if any further
audit procedures are required to ascertain the accuracy of the amount;
and
(c) test of details of other significant items, where applicable.
E. Presentation and disclosure

1 Establish the profit or loss items are properly disclosed in the financial
Results
Initial and
WP ref satisfactory
date
Y/N
checklist relating to this account to ensure appropriate presentation and
disclosure.
3 Establish there is sufficient appropriate evidence in the file to support all

disclosures made.
V. CONCLUSION
Yes No NA Comments
identified in C9.

3 There are no additional comments to be included in the If no, amend

letter of representation (A3) or letter of comment (A8). A3 or A8
Where applicable, the planned extent of reliance on accordingly.
internal controls in this area remains appropriate.



consider the
impact on the
remaining audit
work as well as
work done to-
date.

consider the
effect on audit
opinion in A6.
Date: Date:
Client:
Year end:
SAMPLE SELECTION PLANNING – PROFIT OR LOSS – OPERATING EXPENSES AND OTHERS

Assertion level risk (C8) Approximate number of transactions in a p
L M H within the account balance:

Financial Statement
level risk (C8) L 1.2 1.4 1.6
M 1.4 1.8 2.1
H 1.6 2.1 2.5

Assertions:
Occurrence (O), Completeness (CO), Accuracy (A), Cut-off (CU), O CO A
Classification (CL), Presentation and Disclosure (P&D)
Controls Reliance Strategy L M


(table figure)

No. of samples

factor)
Substantive Strategy L M
OR

(table figure)

No. of samples


factor)
Assertions:
Occurrence (O), Completeness (CO), Accuracy (A), Cut-off (CU), O CO A

Classification (CL), Presentation and Disclosure (P&D)

Conclusion
I am satisfied that the actual sample size computed will be sufficient to enable us to draw conclusions over the population for the assertion ide
Date: Date:
Ref:
T5
ENSES AND OTHERS
oximate number of transactions in a period/
within the account balance:
CU CL P&D
M H
Value
No. of samples
M H
Value
No. of samples
CU CL P&D
ver the population for the assertion identified.
Client: Ref:
Year end: U
U RELATED PARTY TRANSACTIONS AND DISCLOSURES

U1 Lead schedule
U2 Audit programme - Related Party Transactions and
Disclosures
U3 List of related party transactions and balances
U4 Confirmation replies
U5 Confirmation requests
Client: Ref:
Year end: U2
AUDIT PROGRAMME – RELATED PARTY TRANSACTIONS AND DISCLOSURES
SUMMARY SHEET
I. AUDIT OBJECTIVES
Assertions
1 To establish all related parties are properly identified and the corresponding transactions
and balances at the end of the reporting period are complete and correctly recorded in C, A, O
the general ledger.
2 To establish all related party transactions are properly classified and recorded in the A, Classification,
correct period. Cut-off
3 To establish related party transactions are at arm’s length. A
4 To establish loan accounts with directors at the end of the reporting period are complete
and correctly recorded. C, A, O
5 To establish all necessary disclosures concerning related party transactions are

Financial statements level risk

L / M / H
per C8

(L/M/H)
table below)

L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
procedures per C9.
1 Step B
period?
• Are the existing suppliers or customers appear to be related parties?
• Are there controls to ensure significant related party transactions are authorised by personnel with
appropriate level of authority or those charged with governance?
• Are there any significant related party transactions entered into by the entity during the current period?
Yes No Comments
2 Step C
• Are there any loan accounts with directors or shareholders?
3 Step D
period?
• Are there transactions with related parties in which substance differs from form?
4 Step E
• Are there transactions with related parties appear to be outside the normal course of entity’s business?
• Are there transactions with related parties in which substance differs from form?
• Are there indications of fraud from the transactions with the related parties?
5 Step F
• Are terms with existing suppliers or customers appear abnormal?
6 Step G
• Are terms with existing suppliers or customers appear abnormal?
• Were there any corrected or uncorrected misstatements in prior period?
• Are there indications of fraud from the transactions with the related parties?
7 Step H
• Are there any loan accounts with directors or shareholders?
• Are there any significant related party transactions entered into by the entity during the current period?

objectives.
Date: Date:
AUDIT PROGRAMME – RELATED PARTY TRANSACTIONS AND DISCLOSURES
Results
Y/N
A. General
Obtain breakdown of related party transactions and
agree to general ledger
2 Obtain schedule of related party transactions with details of

the names of the related parties and their relationship with
the entity, the nature of the transactions, the amounts of the
transactions and other details. Agree the sub-total to lead
schedule.

(a) comparison of current period’s related party transactions
with that of prior period and corroborate explanations with
our understanding of the entity’s business model; and
(b) review for items above performance materiality, or those


performing analytical procedures that that would cause the
related party transactions to be materially misstated.
B. Identification of related parties

1 Review information provided by those charged with
governance and management and identify the names of all
known related parties and perform the following procedures
in respect of the completeness of this information.
(a) Review the permanent file and prior period’s working

papers for names of known related parties.
(b) Discuss with management and directors and from

knowledge of the company, prepare or update a list of
related parties.
(c) Enquire and document as to the affiliation of those

charged with governance and officers with other companies.
(d) Review shareholder records to determine the names of

principal shareholders or, if appropriate, obtain a listing of
principal shareholders from the share register.
(e) Review minutes of the meetings of shareholders and

those charged with governance and other relevant statutory
records such as the register of directors' interests.
(f) Review the company's tax returns and other information

supplied to the tax authorities.
(g) Review invoices and correspondence from lawyers for

indications of the existence of related parties or related party
transactions.
Results
Y/N
(h) Enquire and document the types of all pensions and
other trusts established for the benefit of employees and the
names of their management.
(i) Review major transactions for any abnormal trade terms,

e.g. unusual prices, interest rates, guarantees, repayment
schedule, etc.
(j) Review Register of Directors’ Interest and Directors’

Report. Compare major customers and suppliers and
consider if there is any connection and abnormal trade
terms.
(k) Obtain names of key management personnel. Compare

major customers and suppliers and consider if there is any
connection and abnormal trade terms.
(l) Review major customers and suppliers for names of

contact parties and addresses for any connection. If so,
consider whether there are any abnormal trade terms.
(m) Consider whether the nature and extent of investment

transactions create related parties, and if so, compare such
new related parties with major customers and suppliers and
consider if there is any abnormal trade terms.
(n) Consider any transactions that are not given accounting

recognition, e.g., receiving or providing services at no cost.
(o) Consider any interest free or back to back loans during

the period. If there is any, enquire into the nature and
determine if there are related parties.
2 Consider the adequacy of control activities over the

authorisation and recording of related party transactions and
transactions outside the normal course of business.
3 Check all members of the audit team are made aware of all
identified related parties and informed of all newly identified
ones.
C. Directors
1 Prepare a schedule of movements on the loan account for
each director and other connected person.
2 Ensure loan accounts with directors’ information are

completed, authorised and properly accounted for.
3 Enquire and document the interest of the directors in other

companies, unincorporated businesses and partnerships.
4 Obtain a confirmation of amount and terms of repayment

from each director/connected person.
Note: The Singapore Companies Act prohibits (directly and
indirectly) non-exempted companies to give loans to
directors except under certain circumstances (CA
s162/s163). Effective 3 January 2016, the prohibition have
been extended to include “quasi-loans” and credit
transactions.
Results
Y/N
5 Enquire and document if there are any directors' interest in
transactions and management transactions between the
company and the directors, and consider whether the fact
should be disclosed.
D. Transactions
1 Review the accounting and other records for large or
unusual transactions or balances, in particular transactions
recognised at or near the end of the financial period and for
those outside the normal course of business. For example:
(a) transactions with abnormal terms;

(b) transactions that appear to lack a logical business
reasons for their occurrence;
(c) transactions in which substance differs from form;
(d) transactions processed or approved in a non-routine
manner;
(e) high volume or significant transactions with certain
customers or suppliers as compared with others;
(f) unrecorded transactions such as the receipt or provision
of management services at no charge;
(g) sales transactions with unusually large discounts;
(h) circular transactions - sales with a commitment to
repurchase;
(i) transactions under contracts whose terms are changed
before expiry;
(j) bank and legal confirmations obtained as part of audit
procedures;
(k) minutes of meetings of shareholders and of those

charged with governance; and
(l) such other records or documents as considered
necessary in the circumstances of the entity.
2 Review all month-end sales and purchase ledger balances
to identify any accounts in the names of related parties.
3 Discuss the nature, purpose and terms of any unusual

transactions with management and enquire as to whether
related parties are involved.
E. Significant transactions outside the normal course of

business
1 Check any previously unidentified related party transactions
outside the normal course of business are documented in
the Specific Assertion Level Risk Assessment (C8.2).
2 Inspect the underlying contracts or agreements, if any, and

evaluate whether:
(a) related parties are involved;
(b) the business rationale suggests they have been entered
into to engage in fraudulent financial reporting;
(c) the transaction terms are consistent with management
explanations;
Results
Y/N
(d) the transactions have been properly accounted for and
disclosed; and
(e) the transactions have been properly authorised. Where
no such formal controls exist, obtain management
representations as to the validity of the transactions and
consider management involvement in the transactions.
F. Transactions at arm’s length

1 Where the financial statements state that a related party
transaction was conducted at arm’s length:
(a) consider the appropriateness of management's process

for supporting this assertion;
(b) verify the source of and/or external data supporting the

assertion. Test for accuracy, completeness and relevance;
and
(c) assess the reasonableness of the assumptions made.
G. Previously unidentified or undisclosed related parties or significant related party transactions

1 Where there are potential related parties or potential related
party transactions that management had not previously
identified or disclosed, determine whether the underlying
circumstances confirm the existence of the relationship or
transaction.
2 Where confirmation is obtained:

(a) promptly inform the audit team of these details;
(b) ask management to identify all transactions with the
newly identified related party;
(c) enquire and document why these had not been identified
previously and why any controls in place failed to pick them
up;
(d) review accounting records for further transactions with

this party;
(e) verify the terms of the transactions and check that they
have been appropriately accounted for and disclosed;
(f) enquire and document the nature of the relationship;

(g) enquire with management and and document whether
there are any further undisclosed related parties or
transactions; and
(h) where management has intentionally failed to disclose

related parties and significant related party transactions
consider whether it is necessary to re¬-evaluate the
reliability of all management responses and representations.

Results
Y/N
2 Establish related party transactions compiled by the
management and represented to us are complete.
3 Establish there is sufficient appropriate evidence in the file
to support all disclosures made.
I. Management representations
1 In respect of related party relationships and transactions,
obtain written representations from management
concerning:
(a) the completeness of information provided;

(b) the appropriateness of the accounting treatment; and
(c) the adequacy of disclosure in the financial statements.
2 Consider if there is any reason to doubt the management

representation and any reason to think that management
and directors may not be aware of certain related party
transactions.
V. CONCLUSION
Yes No NA Comments
documented.
3 There are no additional comments to be If no, amend A3 or

included in the letter of representation (A3) or A8 accordingly.
letter of comment (A8). Where applicable, the
planned extent of reliance on internal controls in
this area remains appropriate.

statements.

in A5.
6 Initial materiality and/or risk assessment need If no, include in A4

not be revised in view of the audit evidence and consider the
obtained. impact on the
remaining audit
work as well as
work done to-date.
7 Sufficient appropriate evidence has been If no, include in A4

obtained to support the audit objectives. and consider the
effect on audit
opinion in A6.

Date: Date:
Client: Ref:
Year end: V
V SUBSEQUENT EVENTS AND GOING CONCERN

V1 Lead schedule
V2 Audit programme – Subsequent Events and Going Concern
V3 Auditor’s evaluation of appropriateness of going concern

basis
V4 Management’s assessment of going concern basis

Client: Ref:
Year end: V2
AUDIT PROGRAMME – SUBSEQUENT EVENTS AND GOING CONCERN

EVALUATION
SUMMARY SHEET
I. AUDIT OBJECTIVES
Steps
1 To check all material adjusting and non-adjusting subsequent events are identified and
correctly reflected in the accounts. A
2 To check the going concern basis of accounting is appropriate. B

3 To confirm all necessary disclosures concerning subsequent events are accurately made
and that the information is appropriately presented and described in the financial
C
statements.
II. AUDIT PROCEDURE DESIGN CONSIDERATIONS

Yes No Comments
procedures per C9.
III. PLANNING CONCLUSION

objectives.
Date: Date:
AUDIT PROGRAMME – SUBSEQUENT EVENTS AND GOING CONCERN
EVALUATION
Results
Initial and
WP ref satisfactory
date
Y/N
A. Subsequent events
1 Obtain an understanding of any procedures client has
established to check that subsequent events are identified.
2 Review the following to check that nothing has occurred from the
balance sheet date to the date of the auditor’s report which
should be disclosed or accounted for:
(a) latest subsequent interim statements, if any; and

(b) minutes of meetings.
Additionally, if the above are not available, consider:

(c) reviewing the latest budgets, forecasts or other management
reports;
(d) inquiring with legal counsel; and
(e) reviewing material and unusual journal entries.
3 Discuss with client and document the date of discussion,

agenda, attendees and details of discussion. Consider the
following:
(a) the current status of items that were accounted for on the
basis of preliminary or inconclusive data;
been entered into;
(c) whether sales or acquisition of assets have occurred or are
planned;
(d) whether the issue of new shares or debentures or an
agreement to merge or liquidate has been made or is planned;
(e) whether any assets have been appropriated by government

or destroyed, for example, by fire of flood;
(f) whether there have been any developments regarding risks

areas and contingencies;
(g) whether any unusual accounting adjustments have been
made or are contemplated;
(h) whether events have occurred or are likely to occur that bring
into question the appropriateness of accounting policies used;
(i) whether events have occurred that are relevant to the

measurements of estimates or provisions; and
(j) whether any events have occurred that are relevant to the
recoverability of assets.
Results
Initial and
WP ref satisfactory
date
Y/N
B. Going concern
1 Where available, obtain copies of cash flow forecasts and/or
budgets and consider:
(a) the reliability of the underlying data;
(b) the adequacy of support for the assumptions underlying the
forecasts;
(c) whether they provide adequate evidence of the entity’s ability
to continue as a going concern; and
(d) where a period of less than 12 months has been considered,
what other evidence is available to support the entity’s ability to
continue as a going concern.
2 Where no cash flow forecasts or budgets are available:

(a) Describe what evidence is available to support the company’s
ability to continue as a going concern; and
(b) Record the evidence obtained to demonstrate that the
directors have considered a period of at least 12 months from
the date of the financial statements.
3 Investigate any apparent delay or unwillingness to approve the

financial statements and consider whether this gives rise to any
doubts about going concern.
4 Where there are any doubts about going concern, evaluate

client’s assessment of going concern performed in V3.1 and
consider what effect, if any, of “yes” answers will have on the
entity’s ability to continue trading as a going concern.
5 Seek written representations from management regarding:

(a) its plans for future action and the feasibility of plans;
(b) its assessment that the company is a going concern; and
(c) any relevant disclosures in the financial statements.

2 Establish there is evidence in the file to support all disclosures

made for both adjusting and non-adjusting events.
IV. CONCLUSION
Yes No NA Comments
identified in C9.
documented.
appropriate.
Yes No NA Comments
statements.


consider the
impact on the
remaining
audit work as
well as work
done to-date.

to support the audit objectives. A4 and
consider the
effect on audit
opinion in A6.
Date: Date:
Client: Ref:
Year end: V3
AUDITOR’S EVALUATION OF THE APPROPRIATENESS OF GOING CONCERN

BASIS
A. Review management’s assessment of the going concern basis performed in V3.1

Yes/No Comments
1 Is the going concern assessment sufficient? If no, please obtain an update on
management’s assessment of
going concern basis.
2 Is the consideration of ‘financial, operational and other If no, please obtain an update on
indicators’ appropriate and accurate? management’s assessment of
going concern basis.
3 Where there are mitigating factors, obtain evidence that the mitigating factors are valid.
4 Where the entity has prepared a cash flow forecast, obtain evidence that the forecast is appropriate.
5 Request written representations from management and where appropriate, those charged with governance,
regarding their plans for future actions and the feasibility of these plans.
6 Where there are uncertainties, consider whether disclosures are appropriate and complete.
B. Consider additional facts or information that have become available since the date on which
management made its assessment.
Yes/No Comments
C. Is the use of the going concern assumption If no, assess management’s basis
appropriate? of preparation of financial
statements.
D. Is Emphasis of Matter (in relation to going concern

basis) or Key Audit Matter – for periods ending on or
after 15 December 2016 required?
E. Where you have been unable to obtain all the

information and evidence necessary to adequately
assess the company’s ability to continue as a going
concern, has suitably worded qualified auditor’s report
been drafted?
F. Where the accounts have not been drawn up on a

going concern basis, and management is unwilling to
do so, has suitably worded qualified audit report been
drafted?
Date: Date:
Client: Ref:
Year end: V3.1
MANAGEMENT’S ASSESSMENT OF THE GOING CONCERN BASIS

(To be completed by management)
Management to provide their basis of determining whether the going concern assumption is appropriate and in
accordance with the requirements of FRS 1 Presentation of Financial Statements.
A. Period of assessment from year end up till: (DD/MM/YYYY)
Yes/No Comments
B. Any intention to cease trading? If yes, please provide details (e.g.
date, reasons, future plans, etc.):
C. Any intention to cease operations? If yes, please provide details (e.g.

date, reasons, future plans, etc.):
D. Consider each of the financial, operational and other indicators below that may indicate a going
concern uncertainty. Tick any events and/or conditions that are applicable to the entity.
Indicators Yes No
1 Financial
1.1 Net liability or net current liability position.
1.2 Necessary borrowing facilities have not been agreed.
1.3 Fixed-term borrowings approaching maturity without realistic prospects of
renewal or repayment; or excessive reliance on short-term borrowings to
finance long-term assets.
1.4 Major debt repayment falling due where refinancing is necessary to the
entity’s continued existence.
1.5 Major restructuring of debt.

1.6 Indications of withdrawal of financial support by other creditors.
1.7 Negative operating cash flows indicated by historical or prospective
1.8 Adverse key financial ratios.

1.9 Substantial operating losses or significant deterioration in the value of
assets used to generate cash flows.
1.10 Arrears or discontinuance of dividends.

1.11 Inability to pay creditors on due dates.
1.12 Inability to comply with the terms of loan agreements.
1.13 Change from credit to cash-on-delivery transactions with suppliers.
1.14 Inability to obtain financing for essential new product development or
other essential investments.
1.15 Major losses or cash flow problems which have arisen since the balance
sheet.
1.16 Substantial sales of property, plant and equipment not intended to be
replaced.
Indicators Yes No
2 Operational
2.1 Management’s intentions to liquidate the entity or to cease operations.
2.2 Loss of key management without replacement.

2.3 Loss of a major market, key customer, franchise, license, or principal
supplier.
2.4 Labor difficulties.

2.5 Shortages of important supplies.
2,6 Emergence of a highly successful competitor.
2.7 Fundamental changes in the market or technology to which the entity is
unable to adapt adequately.
2.8 Excessive dependence on a few product lines where the market is

depressed.
2.9 Technical developments which render a key product obsolete.
3 Other
3.1 Non-compliance with capital or other statutory requirements.
3.2 Pending legal or regulatory proceedings against the entity that may, if
successful, result in claims that are unlikely to be satisfied.
3.3 Changes in legislation or government policy expected to adversely affect

the entity.
3.4 Uninsured or underinsured catastrophes when they occur.
E. What are the management’s plans for future actions in relation to the events or conditions
identified above? Provide details of the plan(s) and feasibility plans, if any.
F. Provide cash flow forecast, where available, with its underlying data and assumptions to support
the going concern assumption.
G. Is there committed but unutilised bank facilities? If yes, provide details of the facilities.
H. Have management identified material uncertainties related to events or conditions that may cast
significant doubt upon the entity’s ability to continue as a going concern? If yes, describe the
material uncertainties.
Conclusion:
We have considered the above factors and the requirements of FRS 1 on the assessment of the entity’s ability
to continue as a going concern. In assessing whether the going concern assumption is appropriate, we have
taken into account all available information about the future, which is at least, but not limited to, twelve months
from the end of the reporting period, and confirmed that:
Tick one
only
1 The entity has the ability to continue as a going concern.
2 There are material uncertainties related to events or conditions that may cast
significant doubt upon the entity’s ability to continue as a going concern as described
in H above, but going concern assumption is appropriate.
3 The going concern assumption is not appropriate. (Specify basis on which the
financial statements is prepared:_______________)
Director: Date:
Client: Ref:
Year end: X
X PROVISIONS, CONTINGENT LIABILITIES AND COMMITMENTS

X1 Lead schedule
X2 Audit programme – Provisions, Contingent Liabilities
and Financial Commitments
X3 List of provisions
X4 List of contingent liabilities
X5 List of commitments
X6 Confirmation from legal counsel
Client: Ref:
Year end: X2
AUDIT PROGRAMME – PROVISIONS, CONTINGENT LIABILITIES AND

COMMITMENTS
SUMMARY SHEET
I. AUDIT OBJECTIVES
Assertions
1 To establish provision recorded in the general ledger exist at the end of the reporting
period. E
2 To establish all liabilities for which an entity has obligations to pay at the end of the
reporting period are correctly recorded in the general ledger. C, R&O, V
3 To establish all necessary disclosures concerning provisions, contingent liabilities and

commitments are accurately made and that the information is appropriately presented and P&D


L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
procedures per C9.
1 Step B
period?
• Is the entity required to provide warranties or after sales services to its customers?
• Are there any on-going or potential litigations and claims?
2 Step C
period?
3 Step D
• Are there any contracts that the entity has committed to enter into to purchase property, plant and
equipment, investment properties or equity investments at the end of the reporting period?
• Are there any non-cancellable operating lease contracts entered into by the entity?
4 Step E
• Are there any significant provisions denominated in foreign currencies?
5 Step F
• Are there any contracts that the entity has committed to enter into to purchase property, plant and
equipment, investment properties or equity investments at the end of the reporting period?
• Are there any non-cancellable operating lease contracts entered into by the entity?
objectives.
Date: Date:
AUDIT PROGRAMME – PROVISIONS, CONTINGENT LIABILITIES AND
COMMITMENTS
Results
Y/N
A. General
Obtain breakdown and agree to general ledger
2 Obtain the detailed schedules and agree to lead schedule.

prior period;
indicators; and

provisions to be materially misstated
Review for contingent liabilities

1 Review the list below for contingent liabilities:
(a) the prior period’s provisions and contingent liabilities;
(b) items reported in the bank confirmations;
(c) minutes of meetings;
(d) major contracts; and
(e) correspondences and others (specify).
2 Discuss the list with the client and check that it is complete and
that adequate disclosure has been made for all contingent
liabilities.
B. Provisions
1 Obtain supporting schedule of provisions for liabilities of
uncertain timing and amount existing at the period end date.
Check its completeness by reviewing:
(a) the prior period’s provisions and contingent liabilities;

(b) items reported in the bank confirmations;
(c) minutes of meetings;
(d) major contracts; and
(e) correspondences and others (specify).
2 Discuss the list with the client and check that it is complete and
that adequate provision has been made for likely losses.
3 For each provision made, consider whether:

(a) there is a present obligation in respect of a past event;
(b) it is probable that payment will be made; and
(c) the amount can be measured with sufficient reliability.
Results
Y/N
4 Conclude our assessment on provisions made by the
management. In the event of management’s disagreement,
consider to bring the matter for discussion with those charged
with governance.
C. Litigations and claims

1 Identify any possible claims or litigations against the entity by
performing the following procedures:
(a) enquire with management and, where applicable, others
within the entity, including in-house legal counsel;
(b) reviewing minutes of meetings of those charged with

governance and correspondence between the entity and its
external legal counsel; and
(c) reviewing legal expense accounts.
2 Where actual or potential litigations or claims against the entity

have been identified:
(d) consider whether direct communication with the entity’s
external legal counsel is required; and
(e) consider alternative procedures where the legal counsel
refuses to reply or where the reply is unhelpful such as
evaluating management’s basis of provision or non-provision.
3 Obtain written representations that all known actual or possible

litigation or claims that might have a material effect on the
financial statements have been disclosed to the auditor.
D. Capital and other commitments

1 Review the management minutes and after period end date
invoices and check all material capital and other commitments
have been identified.
2 Test the items of material commitments to supporting

documents, where applicable.
E. Foreign currencies
1 Confirm all monetary liabilities are translated at the appropriate
entity’s closing rates.

1 Establish provisions, contingent liabilities and financial
commitments are properly disclosed in the financial statements
in accordance with FRSs.

disclosures checklist relating to this account to ensure

VI. CONCLUSION
Yes No NA Comments

documented.


statements.

in A5.

be revised in view of the audit evidence obtained. A4 and
consider the
impact on the
remaining audit
work as well as
work done to-
date.

obtained to support the audit objectives. A4 and
consider the
effect on audit
opinion in A6.
Date: Date:
Client: Ref:
Year end: APP1
APPENDIX 1 CONSTRUCTION WORK IN PROGRESS


1 Lead schedule
2 Audit programme – Construction work in progress
Client: Ref:
Year end: APP1.2
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish all liabilities recorded in the general ledger exist at the end of the reporting
period. E
2 To establish all liabilities for which an entity has obligations to pay at the end of the
reporting period are correctly recorded in the general ledger. C, R&O
3 To establish all other financial liabilities are stated at amortised cost. V

4 To establish liabilities denominated in foreign currencies are translated at the appropriate
foreign currency exchange rates. V
5 To establish all necessary disclosures concerning payables are accurately made and that
II. RISK CONSIDERATIONS

Yes No Comments
1 Were there any corrected or uncorrected misstatements in
prior period? (B7)
2 Were there any disclosure deficiencies in prior period?
3 Was the assessed risk during the prior period for the account
classified as Medium or High?
4 Are there any changes in accounting policies during the
period?
5 Is the account balance significant (amount > PM) or expected
to be significant at the end of the reporting period?
6 Are there significant additions to cost of construction work in

progress during the period?
7 Are there foreign currency denominated additions or
disposals during the period?
8 Are there any transfers of completed costs to property, plant
and equipment account?
9 Are there qualifying assets that are financed with either
specific or general borrowings?
10 Are there indications that the construction work in progress
may be impaired?
11 Can extensive analytical procedures be used to improve the
efficiency and effectiveness of the audit?
12 Are there any non-compliances with FRSs in prior periods?
Document nature of the account balances using the above risk considerations. Determine if these
considerations represent specific risks. (Transfer risk to C8)
III. ASSERTION LEVEL RISK AND SECTION PERFORMANCE MATERIALITY

Inherent Risk (IR) Factor (refer to table
below)

L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
1 Step B
period?
2 Step C
period?
• Are there significant additions to cost of construction work in progress during the period?
• Are there foreign currency denominated additions or disposals during the period?
• Are there any transfers of completed costs to property, plant and equipment?
• Are there qualifying assets that are financed with either specific or general borrowings?
3 Step D
• Are there indications that the construction work in progress may be impaired?
4 Step E
• Are there qualifying assets that are financed with either specific or general borrowings?
Date: Date:
AUDIT PROGRAMME – CONSTRUCTION WORK IN PROGRESS
Results
satisfactory
A. General
Obtain construction work in progress for reconciliation with general ledger
2 Obtain detailed listing of the construction work in progress
balances with details of the movements such as additions to
costs, transfers, adjustments, etc. Agree construction work in
progress balances to lead schedule.

prior period; and
(b) review items above performance materiality, or those
construction work in progress balances to be materially
misstated.
B. Construction work in progress

1 Obtain an understanding of the valuation methods used to
account for the construction work in progress.
(a) policies for capitalisation of internal and external costs;
(b) methods used to compute overheads; and

(c) methods used to capitalise borrowing costs.
Assess whether the valuation methods used are in
compliance with the applicable accounting framework.
C. Test of additions, disposals or transfers
1 In respect of the additions during the period,
(a) select a number of samples from general ledger or
construction work in progress register, where applicable;
(b) verify supporting documents such as capital expenditure
approvals, budget, suppliers’ invoice, etc;
(c) costs denominated in foreign currencies are translated at
the appropriate entity’s spot rates;
(d) check overhead costs are properly allocated based on the
entity’s policy; and
(e) ensure the costs recorded in construction work in progress
meet the recognition criteria.
2 In respect of capitalised borrowing costs
(a) ensure borrowing costs incurred and capitalised are
directly attributable to the acquisition, construction or
production of a qualifying asset;
(b) when the entity borrows funds and uses them for the
purposes of obtaining a qualifying asset, check the
capitalisation rate is properly computed and applied to
calculate the capitalised borrowing costs;
(c) to the extent that an entity borrows funds specifically for
the purpose of obtaining a qualifying asset, the entity shall
determine the amount of borrowing costs eligible for
capitalisation as the actual borrowing costs incurred during
the period less any investment income on the temporary
investments of those borrowings;
Results
satisfactory
(d) ensure capitalisation is ceased when the construction of
the qualifying asset is completed; and
(e) ensure capitalisation is suspended when the construction
of the qualifying asset is suspended.
3 Determine construction is still in progress and has not been
brought into service. With respect to the transfer of
construction work in progress to property, plant and
equipment, ensure the transfer is appropriately accounted for.
D. Assess for indication of impairment

1 Assess whether costs accumulated are reasonable in relation
to budgets and other expectations and there is no indication
of abandonment, disallowance or impairment.

1 Establish construction work in progress are properly disclosed


documented.

statements.
in A5.
the impact on the
remaining audit
work as well as
work done to-
date.
the effect on
audit opinion in
A6
Date: Date:
AUDIT PROGRAMME – CONSTRUCTION WORK IN PROGRESS
Results
satisfactory
E. Presentation and disclosure – Key disclosure requirements / common disclosure weakness
1 Additional disclosures relating to the borrowing costs
capitalised in the construction work in progress:
(a) the amount of borrowing costs capitalised during the

period; and
(b) the capitalisation rate used to determine the amount of
borrowing costs eligible for capitalisation
Client: Ref:
Year end: APP2
AUDIT PROGRAMME – SERVICE ORGANISATIONS

The purpose of this programme is to assist in considering how a company's use of a service organisation affects the
company's internal controls so as to enable identification and assessment of any risk of material misstatement and the design
of further audit procedures. Where the service organisation uses a subservice organisation the programme should also be
applied to that entity.
Results
WP ref satisfactory? Initials and date
(Y/N)
A. General
1 Confirm the significance of the activities of the service
organisation to the company and that further audit
consideration is required.
2 Confirm that:
(a) we have sufficient understanding of the nature and
significance of the services provided by the service
organisation and their effect on the user entity's internal
control relevant to the audit;
(b) the design and implementation of relevant controls at the user

entity that relate to the services provided by the service
organisation (including those that are applied to the
transactions processed) have been reviewed on C5.1 and
C5.2.
(c) results of (a) and (b) provided an adequate basis for the
identification and assessment of risks of material
misstatement; and
(d) sufficient appropriate audit evidence concerning the relevant
financial statement assertions is available from records held
at the user entity.
3 Where sufficient information or evidence is not available from
the user entity, consider:
(a) obtaining a third party report (a type I or type II(A) or type II(B)
report), if available
(i) Type I
A reporting accountant’s report on a service organisation’s

description of the control procedures on whether such control
procedures are fairly described, and the specific control
procedures tested operated as described as at a specific
date, or during a specific period.
(ii) Type II(A)

procedures are fairly described, were suitably designed to
achieve the control objectives, and had been in operation as
of a specific date.
Note: Under this report, no assessment of the adequacy or

completeness of the control objectives in relation to the risks
they were designed to address is performed, nor is any
assessment carried out on whether the control procedures
achieve the stated control objectives.
(iii) Type II(B)

procedures are fairly described, were suitably designed to
achieve specified control objectives, had been placed in
operation as of a specific date, and on whether the controls
that were tested were operating with sufficient effectiveness
to provide reasonable, but not absolute, assurance that the
related control objectives were achieved during the period
specified.
(b) contacting the service organisation, through the user entity, to

obtain specific information;
(c) visiting the service organisation and performing procedures
that will provide the necessary information/evidence about the
relevant controls and assertions at the service organisation;
or
(d) using another auditor to perform procedures that will provide
the necessary information/evidence about the relevant
controls and assertions at the service organisation.
B. Third party reports

1 Consider the sufficiency and appropriateness of the audit
evidence provided by a type I or type II(A) or type II(B) report
including
(a) the service auditor's professional competence and
independence from the service organisation; and
(b) the adequacy of the standards under which the report was
issued.
2 Where it is intended to use a report as audit evidence to
support understanding of the design and implementation of
controls:
(a) evaluate whether the description and design of controls at the
service organisation is at a date or for a period that is
appropriate for the user auditor's purposes;
(b) evaluate the sufficiency and appropriateness of the evidence
provided by the report for the understanding of the user
entity's internal control relevant to the audit; and
(c) determine whether complementary user entity controls
identified by the service organisation are relevant to the user
entity and, if so, obtain an understanding of whether the user
entity has designed and implemented such controls.
C. Control
1 When the user risk assessment includes an expectation that
controls at the service organisation are operating effectively,
have we obtained evidence about the operational
effectiveness of those controls? Consider:
(a) obtaining a type I report, if available;

(b) performing appropriate tests of controls at the service
organisation; or
(c) using another auditor to perform tests of controls at the
service organisation on behalf of the user auditor
2 Where the firm intends to use a type II report as audit
evidence that controls at the service organisation are
operating effectively:
(a) consider whether the description, design and operating
effectiveness of controls at the service organisation is at a
date or for a period that is appropriate for the user auditor's
purposes;
(b) determine whether complementary user entity controls

identified by the service organisation are relevant to the user
entity and, if so
(i) review the design and implementation of those controls; and
(ii) test their operational effectiveness

(c) evaluate the adequacy of the time period covered by the tests
of controls and the time elapsed since the performance of the
tests of controls; and
(d) consider whether the tests of controls performed by the
service auditor and the results thereof are relevant to the
assertions in the user entity's financial statements and
provide sufficient appropriate audit evidence to support the
firm's risk assessment.
D. Fraud and Error

1 Inquire of management whether the service organisation has
reported, or whether management is otherwise aware of, any
fraud, non-compliance with laws and regulations or
uncorrected misstatements affecting the financial statements.
E. Direct Access to Service Organisation

1 Consider whether it is necessary to visit the service
organisation in order to obtain the required audit evidence.
2 Where necessary, arrange for the appropriate authority to be

sent from the company to the service organisation to provide
access to the necessary information.
F. Indemnities
1 Review the financial standing of the service organisation and
the resources available to it insofar as it is considered
necessary to rely on the operation of an indemnity from the
service organisation in assessing the company's status as a
going concern.
G. Conclusion
1 Consider whether, in relation to service organisations:
(a) we have sufficient understanding of the company and its
environment, including its internal control, to identify and
assess the risks of material misstatement and design further
audit procedures in response to those risks; and
(b) sufficient appropriate audit evidence concerning relevant

financial statement assertions has been obtained.
2 Consider whether there are any points which need to be
included in a letter of representation or letter of comment and
record on A3 or A8 as appropriate.
3 Review the planned extent of reliance on internal controls in
this area and consider whether this remains appropriate.
4 Assess whether the initial materiality and/or risk assessment

should be revised in view of the audit evidence obtained.
Record details of any necessary adjustments on A4. Consider
the impact on the remainder of the audit work and on any
work undertaken to date.
Date: Date:
Client: Ref:
Year end: APP3
APPENDIX 3 INTANGIBLE ASSETS

1 Lead schedule
2 Audit programme – Intangible Assets
Client: Ref:
Year end: APP3.2
AUDIT PROGRAMME – INTANGIBLE ASSETS
SUMMARY SHEET
I. AUDIT OBJECTIVES
Assertions
1. To establish intangible assets recorded in the general ledger exist at the end of the reporting period. E
To establish intangible assets and/or expenditure at the end of the reporting period meet the recognition criteria
2. C
are correctly recorded in the fixed assets register and general ledger.
To establish intangible assets acquired in foreign currencies are translated at the appropriate foreign currency
3. V&A
exchange rates.
4. To establish adequate allowances are made for impairment and amortisation where applicable. V&A
To establish the entity owns, or has legal rights to, the intangible assets recorded in the general ledger at the end
5. of the reporting period. All intangible assets are free of restrictions on use, liens, or other security interests or, if R&O
not, such restrictions, liens, or other security interests are identified and disclosed in the financial statements.
To establish all necessary disclosures concerning intangible assets are accurately made and that the information
6. P&D
is appropriately presented and described in the financial statements.
Yes No Comments
Were there any corrected or uncorrected misstatements in prior
1.
period? (B7)
2. Were there any disclosure deficiencies in prior period?
Was the assessed risk during the prior period for the account
3.
Is the account balance significant (amount > PM) or expected to be

5.
significant at the end of the reporting period?
Are there foreign currency denominated additions or disposals during

7.
the period?
Are the useful lives excessive or inadequate based on prior
8.
experience?
9. Are there any intangible assets with indefinite useful lives?
Are there intangible assets related to R&D activities recognised

10.
during the period?
11. Is there a revaluation model applied on certain classes of the assets?
Where the work of an expert is to be relied on for the following:

• valuation of assets and liabilities;
• determination of quantities;
12. • application of specialised techniques to determine
amounts; or
• measurement of work completed,
the auditor is to complete one or both of the following supplementary
programmes:
13. Are there any indications that assets may be impaired based on our
understanding of the entity’s business environment?
Can extensive analytical procedures be used to improve the efficiency
14.
and effectiveness of the audit?
Document nature of the account balances using the above risk considerations. Determine if these considerations represent
specific risks. (Transfer risk to C8)
Assertions E R&O C V&A P&D

L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5
Yes No Comments
1. Step B
· Is the account balance significant (amount > PM) or expected to be significant at the end of the reporting period?
2. Step C
· Are there significant additions and/or disposals during the period?
· Are there foreign currency denominated additions or disposals during the period?
· Are there intangible assets related to R&D activities recognised during the period?
3. Step D
· Are the useful lives excessive or inadequate based on prior experience?
4. Step E
· Are the useful lives excessive or inadequate based on prior experience?
· Are there any intangible assets with indefinite useful lives?
· Are there any indications that assets may be impaired based on our understanding of the entity’s business environment?
5. Step F
· Are there any non-compliances with FRSs in prior periods?
· Are there any changes in accounting policies during the period?
· Are there intangible assets related to R&D activities recognised during the period?
Date: Date:
AUDIT PROGRAMME - INTANGIBLE ASSETS
Results
Initials and
WP ref satisfactory
date
Y/N
A. General
Obtain movement schedule and reconcile to general ledger
Establish that intangible assets recorded in prior period end is appropriately
brought-forward into current period and current period’s movements are
appropriately aggregated to period end balance. The procedures include but not
limited to:
Obtain and check, or prepare, a lead schedule incorporating additions or disposals

for the current period’s figures, accumulated amortisation and impairment losses
1 where applicable and reconcile to the trial balance in B5. Agree the opening
balances to prior period’s financial statements and check arithmetic accuracy of the
lead schedule.
Obtain the list of additions during the period, if any, with the details of the intangible
2
assets acquired, date of acquisition, cost, etc. Agree to register and lead schedule.
Obtain the list of disposals during the period, if any, detailing the items disposed,
respective cost, accumulated amortisation and net book value at the date of
3
disposal. If the item was sold, include the proceeds received and calculation of
gain/loss on disposal. Agree to register and lead schedule.
Perform procedures to test the accuracy and completeness of the information in all
4
listing and schedules provided by management for audit purpose.
Establish that intangible assets balance is not materially misstated.
Carry out analytical procedures such as:
(a) comparison of the current figures with those of prior periods by analyzing the
5
reasons for fluctuation in the current period against the business development; and
(b) review and comparison of key ratios or other performance indicators.

Determine if there is a specific risk identified during the audit that would cause the
6 auditor to be concerned that the investment property balance may be materiality
misstated.
B. Test of ownership and existence
In respect of intangible assets on separate acquisition, check the
ownership/existence in relation to copyrights, patents, franchises, trademarks and
1 similar intangible assets, by inspecting agreements, legal opinions and other
documents of title to check that these assets remain in existence and belong to the
entity.
In respect of internally generated intangible assets, check the existence of intangible

2 assets by examining evidence of expenditure incurred e.g. agreements, expenditure
report supporting by invoices and proof of payments, approvals for expenditure, etc.
C. Additions and disposals
Review, or obtain understanding on the components of costs included in the

intangible assets, to ensure the costs meet the definition of intangible assets.
1
When intangible assets are recognised using revaluation model, perform relevant
procedures listed in App3.2-SUP.
Check that expenditure on an intangible item that was initially recognised as an

2 expense shall not be recognised as part of the cost of an intangible asset at a later
date.
Vouch additions to supporting documentation. Check that:
(a) cost and capitalised expenditure meet the recognition criteria of intangible
assets;
(b) they have been included in the register/listing at the correct amount;
3 (c) for cost denominated in foreign currency, ensure that the entity use the entity’s
spot rate for recording into the functional currency; and
(d) the expenditure has been properly authorised.
When entity capitalised costs of development in a R&D activity, perform relevant
procedures listed in App3.2-SUP.
Check the completeness of intangible assets by:
(a) assessing whether there was any expenditure that should have been capitalised
4 as intangible assets but expensed in the income statement;
4
(b) reviewing board minutes (D5); and performing search for unrecorded liabilities
(Section N).
Check that the disposal of intangible assets during the period have been properly
accounted for. Consider performing the following procedures:
(a) vouch disposals to supporting documentation.
(b) any sales proceeds have been correctly accounted for;
(c) foreign currency exchange rates used reflect the spot rate used by the entity for
transaction recording purpose;
5
(d) any profit or loss on disposal has been correctly calculated;
(e) they have been removed from the intangible asset register/listing;
(f) they should be derecognised in the current period; and
(g) they have been properly authorised.
D. Amortisation
Establish that amortisation charge is reasonable e.g. by performing procedures such
as, but not limited to:
For intangible assets with finite useful lives:
(a) compare bases and rates of amortisation used by the entity against other
companies within the same industry; determine if the bases and rates appear to be
unreasonable that require further assessment;
(b) confirm that all assets are being amortised in accordance with the entity's
1
accounting policy; and
(c) test check calculations or check reasonableness of amortisation charge for the
period.
For intangible assets with indefinite useful life, perform relevant procedures listed in
App3.2-SUP.
In the event when an entity estimates the residual value of an intangible assets with
2 definite useful life to be more than zero, assess the appropriateness of such
judgement and substantiate with supporting documents.
E. Impairment
Establish whether there is any indication that an asset may be impaired.
Consider and document such consideration, whether there are any indications of
impairment, which might adversely affect the value of the intangible assets, and
1
check that these have been dealt with in accordance with applicable accounting
standards.
Establish that the required disclosure related to intangible assets are properly
disclosed in the financial statements.
Consider the need to complete the financial statements disclosure checklist relating
1
to this account to ensure appropriate presentation and disclosure.
Consider the common key disclosure requirements/weakness relating to this

2
account and ensure that these have been properly addressed.
Establish that there is sufficient appropriate evidence on the file to support the
financial statements disclosures by cross referencing all evidence obtained to the
respective work papers and/or financial statements disclosure notes, vice versa.
VI. CONCLUSION
Yes No NA Comments
There are no exceptions in our response to the risks
1.
identified in C9.
The work has been performed as planned and the

2.
findings and results have been adequately documented.
There are no additional comments to be included in the

letter of representation (A3) or letter of comment (A8). If no, amend A3 or A8
3.
All necessary information has been obtained for the

4.
Misstatements identified (other than those deemed to be

5.
If no, include in A4 and

Initial materiality and/or risk assessment need not be consider the impact on the
6.
revised in view of the audit evidence obtained. remaining audit work as well
as work done to date.

Sufficient appropriate evidence has been obtained to
7. consider the effect on audit
support the audit objectives.
opinion in A6.

Date: Date:
Results
Initials and
WP ref satisfactory
date
Y/N
F. Presentation and disclosure – Key disclosure requirements / common disclosure

weakness
Check that the disclosure of the items are in accordance with the applicable
financial reporting standards, including but not limited to:
(a) the useful lives or the amortisation rates used
(b) the amortisation methods used for intangible assets with finite useful lives;
(c) the gross carrying amount and any accumulated amortisation (aggregated with
accumulated impairment losses) at the beginning and end of the period
(d) the line item(s) of the statement of comprehensive income in which any
1 amortisation of intangible assets is included
(e) reconciliation of the carrying amount from the beginning to end of the period
(f) description, the carrying amount and remaining amortisation period of any
individual intangible asset that is material to the entity’s financial statements
(g) the existence and carrying amounts of intangible assets whose title is restricted
and the carrying amounts of intangible assets pledged as security for liabilities.
Client: Ref:
Year end: App3.2 - Sup
Results
Initials and
WP ref satisfactory
date
Y/N
F. Presentation and disclosure – Key disclosure requirements / common disclosure

weakness
Check that the disclosure of the items are in accordance with the applicable
financial reporting standards, including but not limited to:
(a) the useful lives or the amortisation rates used
(b) the amortisation methods used for intangible assets with finite useful lives;
(c) the gross carrying amount and any accumulated amortisation (aggregated with
accumulated impairment losses) at the beginning and end of the period
(d) the line item(s) of the statement of comprehensive income in which any
1 amortisation of intangible assets is included
(e) reconciliation of the carrying amount from the beginning to end of the period
(f) description, the carrying amount and remaining amortisation period of any
individual intangible asset that is material to the entity’s financial statements
(g) the existence and carrying amounts of intangible assets whose title is restricted
and the carrying amounts of intangible assets pledged as security for liabilities.
SUPPLEMENTARY PROCEDURES - INTANGIBLE ASSETS
Results
Initials and
WP ref satisfactory
date
Y/N
A Internally generated intangible assets – R& D
If an entity recognised an intangible asset arising from the development
expenditure, check that the development costs is only recognised if and only if an
entity can demonstrate all of the following:
(a) the technical feasibility of completing the intangible asset so that it will be
available for use or sale.
(b) its intention to complete the intangible asset and use or sell it.
(c) its ability to use or sell the intangible asset.

1
(d) how the intangible asset will generate probable future economic benefits?
Among other things, the entity can demonstrate the existence of a market for the
output of the intangible asset or the intangible asset itself or, if it is to be used
internally, the usefulness of the intangible asset.
(e) the availability of adequate technical, financial and other resources to complete
the development and to use or sell the intangible asset.
(f) its ability to measure reliably the expenditure attributable to the intangible asset
during its development.
B Intangible assets with indefinite useful life
When applicable, assess the appropriateness of management’s judgement as to
whether the indefinite useful life of an intangible assets remained justifiable. If not,
1
the changes in useful life assessment from indefinite to finite should be accounted
for in accordance with FRS 8.
Obtain, or request the management to provide the impairment test related to

goodwill, intangible assets with indefinite useful life, and/or intangible assets not yet
available for use where applicable. Assess the appropriateness of management’s
conclusion on the impairment test. Consider,
(a) If the recoverable amount of an asset (i.e. the higher of an asset's fair value less
cost to sell and its value in use) is less than the carrying amount, check that an
2 impairment loss has been recognised immediately in profit or loss, unless the asset
is carried at revalued amount, where the revaluation was taken to other
comprehensive income. In this case, the impairment is also recognised in other
comprehensive income up to the amount of any previous revaluation.
(b) Where an increase in carrying value is attributable to a reversal of previous

impairment loss, confirm that the carrying value (net of amortisation) does not
exceed the value at which the asset would have been stated had no previous
impairment loss been recognised.
C Intangible assets recognised using the revaluation model
Where the intangible assets are stated at revalued amount, check that:
(a) the revaluation amount is supported by appropriate evidence such as
independent valuation report by professional valuers.
(b) the valuation is consistently applied to all assets in that class;
(c) any revaluation increase is recorded in other comprehensive income and
accumulated in equity under the heading of revaluation surplus;
1
1
(d) any revaluation decrease is recognised against any previous revaluation surplus
to the extent of the credit balance existing in the revaluation surplus after which any
excess are recognised in profit or loss; and
(e) where a revalued asset was disposed of, any revaluation surplus was
transferred to retained earnings and not made through profit or loss.
Client: Ref:
Year end: APP4
APPENDIX 4 DEFINED BENEFIT PLAN

1 Lead schedule
2 Audit programme – Defined Benefit Plan
3 Defined benefit plan worksheet
4 Actuarial report
AUDIT PROGRAMME – DEFINED BENEFIT PLAN
SUMMARY SHEET
I. AUDIT OBJECTIVES
Assertions
To establish the deficit or surplus arising from defined benefit plan is correctly computed using the appropriate
1. E, R&O, C, V
basis and assumptions.
2. To establish the fair value of the plan assets is correctly measured and recorded. E, R&O, C, V
To establish the present value of the defined benefit obligations is properly determined using the appropriate
3. E, R&O, C, V
method.
To establish all necessary disclosures concerning defined benefit plan are accurately made and that the
4. P&D
information is appropriately presented and described in the financial statements.
Yes No Comments
1.
period? (B7)
2. Were there any disclosures deficiencies in prior period?
3.

5.
Is fair value assessment of the defined benefit plan performed by the
6.
management?
7. Can the fair value of the planned assets be reliably estimated?
Is deferred tax in respect of the surplus arising from the defined

8.
benefit plan recognised by the entity?
9.
Assertions E R&O C V&A P&D

L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5
Yes No Comments
1. Step B
· Is fair value assessment of the defined benefit plan performed by the management?
2. Step C
· Can the fair value of the planned assets be reliably estimated?
3. Step D
· Is deferred tax in respect of the surplus arising from the defined benefit plan recognised by the entity?
4. Step E
· Is fair value assessment of the defined benefit plan performed by the management?
· Can the fair value of the planned assets be reliably estimated?
· Is deferred tax in respect of the surplus arising from the defined benefit plan recognised by the entity?
Date: Date:
Results
Initials and
WP ref satisfactory
date
Y/N
A. General
Establish that the defined benefit assets or liability recorded agrees to general
ledger and supporting details. The procedures include but not limited to:
Obtain and check, or prepare, a lead schedule for the current period’s figures and
1
reconcile this to the trial balance in B5.
Obtained the movement schedule of the defined benefit assets and liabilities
2
including all relevant schedule. Agree the sub-total to lead schedule.
3
Establish that defined benefit assets and liabilities are not materially misstated.
Carry out analytical procedures such as:
4 (a) comparison of the current figures with those of prior periods; and
(b) review of key ratios or other performance indicators.
Review for items above performance materiality or that are otherwise unusual and
5
verify.
B. Actuarial assumptions
Established that the defined benefit assets and liabilities are properly valued.
Consider the perform the following procedures:
Complete the supplementary audit programme “Using the Work of Management’s
1
Expert” (App8) in respect of the valuation.
Review the principal actuarial assumptions advised by the actuary for
appropriateness. For example:
(a) Discount rate – compare to the yield at the entity’s period end on a AA rated
corporate bond, whose term is equivalent to that of the scheme’s liabilities.
(b) Expected return on assets – compare to independently published data.

2 (c) Future salary increases – compare to the expected rate of inflation (see below)
and historical pay rises granted by the company.
(d) Future pension increases – vouch to the scheme’s trust deed and rules.
(e) Mortality rates – compare to independently published data.
(f) Inflation – compare against the difference in yield between a long dated fixed
interest and index-linked gilt with the same term (redemption date).
(g) Any other principal actuarial assumptions.
Consider the sensitivity of the calculations to changes in the actuarial assumptions,
3 and assess whether any discrepancies identified above may have a material impact
on the surplus/deficit.
Check that the scheme liabilities have been calculated using the projected unit
4
credit method.
C. Plan Assets
Establish that the fair value of the plan assets is properly valued and accounted for.
Consider to perform the following procedures:
Complete the supplementary audit programme “Using the Work of Management’s

1
Expert” (App8) in respect of the scheme’s investment manager(s).
Obtain a copy of the investment valuation report directly from the investment
2 manager(s) as at the entity’s period end, and agree to the valuation used by the
actuary.
For a sample of securities held, vouch their market value per the investment
3
manager’s report to third party data such as the financial press.
Consider whether, other than investments, the scheme is likely to have any other
4 material net assets which should be included. Check that such assets are valued at
market value.
D. Recognition of surplus/deficit
Established that the surplus or deficit arising from the defined benefit plan is
properly accounted for. Consider to perform the following procedures:
If the scheme is in surplus, check that the resulting asset is recognised only to the
1 extent that it is able to recover a surplus either through reduced contributions in the
future or through refunds from the scheme.
Consider the impact on deferred tax:
(a) A deferred tax asset should only be recognised to the extent that the employer
will receive a reduction in future income tax through the paying of higher
contributions.
2
(b) Check that the deferred tax asset is calculated at the appropriate rate.
(c) Check that any deferred tax asset is deducted from the deficit and not
combined with any other deferred tax balances e.g. accelerated capital allowances.

Establish that the disclosure of the items is in accordance with the applicable
financial reporting standards.
Consider the need to complete the financial statements disclosure checklist relating
1
Consider the common key disclosure requirements/weakness relating to this

2
VI. CONCLUSION
Yes No NA Comments
1.
identified in C9.
2. findings and results have been adequately
documented?

3.

4.

5.

6.

opinion in A6.

Date: Date:
Results
Initials and
WP ref satisfactory
date
Y/N
E. Presentation and disclosure – Key disclosure requirements / common disclosure

weakness
An entity shall disclose information that:
(a) explains the characteristics of its defined benefit plans and risks associated with
them;
1
(b) identifies and explains the amounts in its financial statements arising from its
defined benefit plans; and
(c) describes how its defined benefit plans may affect the amount, timing and
uncertainty of the entity’s future cash flows
Where disclosures about pension schemes include the directors’ opinions regarding
2 actuarial assumptions and other issues, check that these opinions are confirmed in
the letter of representation.
Client: Ref:
Year end: APP5
APPENDIX 5 SHARE-BASED PAYMENTS


1 Lead schedule
2 Audit programme – Share-based Payments
3 Details of plan
4 Fair value estimation
Client: Ref:
Year end: APP5.2
SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish share-based payment transactions are correctly recorded and accounted for
in the balance sheet and profit or loss. E, R&O, C, V
2 To establish all necessary disclosures concerning share-based payment transactions are


Yes No Comments
prior period? (B7)
3 Was the assessed risk during the prior period for the account
period?
6 Is fair value assessment of the share-based payment

transactions performed by the management?
7 Where the work of an expert is to be relied on for the
following:
• application of specialised techniques to determine amounts;
or
The auditor is to complete one or both of the following

supplementary programmes:


below)

L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
1 Step B
period?
• Is fair value assessment of the share-based payment transactions performed by the management?
2 Step C
• Is fair value assessment of the share-based payment transactions performed by the management?
Date: Date:
AUDIT PROGRAMME – SHARE-BASED PAYMENT
Results
satisfactory
A. General
Establish that the share-based payments recorded agrees to
general ledger and supporting details. The procedures include
but not limited to:
1 Obtain and check, or prepare, a lead schedule for the current
period's figures and reconcile this to the trial balance in B5.
2 Obtain the movement schedule of the share-based payments
including all relevant schedule. Agree the sub-total to lead
schedule.
3 Perform procedures to test the accuracy and completeness of

the information in all listing and schedules provided by
management for audit purpose.

Establish that defined benefit assets and liabilities are not
materially misstated
(a) comparison of the current figures with those of prior
periods; and
5 Review for items above performance materiality or that are
otherwise unusual and verify.
B. Share-based payment
Establish that the share-based payments expenses are
correctly determined and accounted for. Consider the perform
the following procedures:
1 In respect of the share-based payments arrangement entered

into the period, obtain the details of the arrangements
including but not limited to agreements between the entity and
its employees (or suppliers), board of directors’ or
shareholders’ minutes of meeting, share-based payment
scheme detail plan, etc.
2 Check and document that the accounting treatment of any

share-based payment transactions is in accordance with
applicable accounting standards. In particular for equity-
settled share-based payment transactions, has the entity
measured the goods or services received, and the
corresponding increase in equity at:
(a) the fair value of the goods or services received; or

(b) if the entity cannot estimate reliably the fair value of the
goods or services
(c) received then, indirectly, by reference to the fair value of
the equity instruments granted?
3 Inquiry on management’s method of determining the fair value
of the share-based payments. Critically evaluate the
reasonableness of the assumptions used by the management
and obtain relevant supporting documents to support the
valuation of equity settled financial instruments.
4 When the valuation is performed by a valuation expert,

complete the supplementary audit programme “Using the
Work of Management’s Expert” (App8) in respect of the
valuation.
5 For cash-settled share-based payment transactions, has the

entity measured the goods or services acquired and the
liability incurred at the fair value of the liability?
6 For share-based payment transactions in which the terms of

the arrangement provide either the entity or the counterparty
with the choice of whether the entity settles the transaction in
cash (or other assets) or by issuing equity instruments: has
the entity accounted for that transaction, or the components of
that transaction, as either:
(a) a cash-settled share-based payment transaction if, and to

the extent that, the entity has incurred a liability to settle in
cash or other assets; or
(b) as an equity-settled share-based payment transaction if,

and to the extent that, no such liability has been incurred?

Establish that the disclosure of the items is in accordance with
the applicable financial reporting standards.

2 Consider the common key disclosure requirements/weakness

relating to this account and ensure that these have been
properly addressed.

documented.

statements.
in A5.
the impact on the
remaining of the
audit work as
well as work
done to date.

the effect on
audit opinion in
A6
Date: Date:
AUDIT PROGRAMME – SHARE-BASED PAYMENT
Results
satisfactory
C. Presentation and disclosure – Key disclosure requirements / common disclosure weakness
1 An entity shall disclose the following information:
(a) Description of each type of share-based payments
(b) Number and weighted average exercise prices for each
category such as beginning for the period, granted, forfeited,
exercise, expired, outstanding and exercisable at the end of
(c) Weighted average exercise prices of options exercised
the period.
and outstanding at end of the period.
(d) the range of exercise prices and weighted average
remaining contractual life of the outstanding options at end of
the period.
(e) The fair value of the share options under different
categories.
(f) Expenses recognised during the period.
2 Where the accounting for share-based payment transactions
includes the directors' estimates of the number of equity
instruments expected to vest, or other issues, check that
these opinions are confirmed in the letter of representation.
Client: Ref:
Year end: APP6
APPENDIX 6 GOODS AND SERVICES TAX (GST)


1 GST account/reconciliation
2 Audit programme – Goods and Services Tax (GST)
3 GST compliance checklist
4 Analysis of GST account
Client: Ref:
Year end: APP6.2
AUDIT PROGRAMME – GOODS AND SERVICES TAX (GST)

SUMMARY SHEET
I. Audit objectives
Assertions
1 To establish the goods and services tax are correctly recorded and accounted for. C, E, V, R&O
2 To establish the goods and services tax are correctly computed and recorded. V
3 To establish all necessary disclosures concerning goods and services tax are accurately
statements.

Yes No Comments
prior period? (B7)
3 Was the prior period assessed risk for the account classified
as Medium or High?
period?


below)
Performance materiality [Materiality/IR
Factor]

L M H
L 1.2 1.4 1.6
H 1.6 2.1 2.5

Yes No Comments
1 Step B
period?
2 Step C
Date: Date:
AUDIT PROGRAMME – GOODS AND SERVICES TAX (GST)
Results
satisfactory
A. General
Establish that GST balances recorded agrees to general
ledger and supporting details. The procedures include but not
limited to:
1 Obtain and check, or prepare, a lead schedule for the current
period's figures and reconcile this to the trial balance in B5.
2 Obtain the movement schedule of the GST balances including

all relevant schedule. Agree the sub-total to lead schedule.
3 Perform procedures to test the accuracy and completeness of

the information in all listing and schedules provided by
management for audit purpose.

Establish that GST balances are not materially misstated.
(a) comparison of the current figures with those of prior
periods; and
5 Review for items above unusual performance materiality or
that are otherwise and verify.
B. GST
Establish that GST is correctly accounted for and recorded in
the general ledger.
1 Obtain and check, or prepare, a GST control account. Agree
the GST creditor or repayment due to the relevant GST
return.
2 Vouch the entries on the GST control account to the GST

returns.
3 Reconcile the turnover per the accounts to the outputs
recorded on the GST returns.
4 Reconcile the potential GST on the turnover per the accounts
to the outputs on the GST control account.
5 Review the entity’s GST affairs, including any

correspondence, and check that adequate provision is made
for any possible penalties and interest on under-declarations.
6 Where considered necessary complete the GST checklist on

App6.3.
C. Test of additions, disposals or transfers
Establish that the disclosure of the items is in accordance with
the applicable financial reporting standards.

2 Consider the common key disclosure requirements/weakness

relating to this account and ensure that these have been
properly addressed.

documented.

statements.
in A5.
the impact on the
remaining audit
work as well as
work done to-
date.

the effect on
audit opinion in
A6
Date: Date:
Client: Ref:
Year end: APP6.3
GST COMPLIANCE CHECKLIST

Objective
To check that all GST liabilities are correctly included in the accounts.
The checklist sets out the common points to be considered when reviewing GST – it is not exhaustive.
Results
satisfactory
Registration
1 Unregistered company
Confirm that taxable turnover does not exceed registration
limits (currently and historically).
2 Company registered as intending trader
Does intention to make taxable supplies continue?
3 Exemption from registration
Is trader still eligible for exemption?
4 Group registration
(a) Are all members of the legal group either in the GST group
or separately registered?
(b) Are all members of the GST group eligible for
membership?
(c) Are the latest and current details of group members
received from the Comptroller correct?
(d) Does a system exist to notify the Comptroller of group or
company structure changes?
5 Compulsory registration
Are the details on the latest Certificate of Registration
correct?
Sales
1 Standard-rated sales
(a) Confirm GST treatment is in accordance with any
directions from, or written agreement with the Comptroller
(b) Are part-exchanges and discounts correctly dealt with?
(c) Are valid GST invoices issued for each transaction (where
appropriate)?
(d) Are the conditions of any retailers/special schemes
complied with?
2 Zero-rated sales
Is zero rating appropriate?
3 Exports
Is adequate evidence of exports kept?
4 Going concern entity
Has GST been dealt with correctly on sales of going concern
entity?
Results
satisfactory
Purchases
1 “Routine”
(a) Is input tax only claimed when evidence is received?
(b) Are all invoices retained and accessible?
(c) Does client check that all invoices are correctly addressed
to him as the registered trader?
(d) Are there systems to identify non-deductible inputs
(including non-business input GST)?
2 Acquisitions and imports
(a) Is tax only claimed when evidence is on hand?
(b) If services are imported, are reverse charge procedures
applied?
3 Expenses
Have all disallowable expenses been correctly excluded?
4 Going concern entity

Has GST been dealt with correctly on purchases of going
concern entity?
Partial exemption
Check if entity allowed to apply partial exemption provision
under the GST Act.
(a) Is exempt input tax below the de Minimis limit if no
restriction of input GST made?
(b) Is the annual adjustment carried out correctly?
(c) Are any special methods formally agreed with the
Comptroller?
Accounting records and treatments
Check that entity maintains proper accounting records as
required by the GST Act:
(a) Are records properly filed, referenced and retained for
GST inspections:
(i) in the case of records relating to accounting periods ending
before 1st January 2007, for seven years; or
(ii) in the case of records relating to accounting periods

ending after 1st January 2007, for five years?
(b) Do GST records agree with the management and financial
accounts available for inspection including a reconciliation of
turnover?
(c) Are systems in place to deal with non-routine transactions,

e.g. those outside computerised systems or ledgers?
Groups of companies
In respect of group companies, check the following:
(a) Do all companies invoicing each other within a GST group
correctly omit GST?
(b) Do supplies between members of the legal group (e.g.
management charges) who are not in the GST group carry
GST as appropriate?
(c) Is GST accounted for as appropriate on sales including

transfers of assets?
(d) Is non-deductible input tax identified and not claimed?
Results
satisfactory
Property sales and developments
1 In respect of purchases:
(a) Has GST been properly reclaimed on the acquisition of
interests in land or buildings in the period?
(b) Where purchases are for sale or letting, has the option to
tax been made (if appropriate)?
(c) Has any tax due on lease surrenders been identified and
accounted for?
2 In respect of developments:
(a) Have all exempt developments been considered for their
effect on input tax deduction?
(b) Have all self-supplies been identified and accounted for?
(c) Have all necessary certificates for relevant residential or

charitable buildings been obtained?
3 In respect of sales
(a) If option to tax has been made, has GST been applied to
sale proceeds?
(b) Have all other material property sales had the correct
liability applied?
(c) Do all contracts include a specific clause on the treatment
of GST?
Second-hand schemes and global accounting
1 In respect of entity under second-hand schemes and global
accounting, check:
(a) Is the trader eligible to operate the schemes used?
(b) Are all invoicing/stock record-keeping requirements met?
(c) Are transactions outside the scheme treated properly?
Retailer’s schemes
1 In respect of entity under retailer’s scheme, check that:
(a) Is trader still eligible to use the scheme operated?
(b) Are daily gross takings correctly calculated?
(c) Are records kept according to the Comptrollers
requirements?
(d) Are transactions outside the scheme correctly recorded?
(e) Is evidence of wastage, theft, etc. maintained?

(f) Is evidence of pricing/accounting policy maintained?
(g) Are annual adjustments carried out where required?
Special schemes – cash accounting – and annual accounting
In respect of entity under retailer’s scheme, check that:
Is trader still eligible to use the scheme(s)?
Deregistration
Where the trader has deregistered, has output GST been
properly accounted for on assets on hand (including
buildings)?
Penalties and assessments

Consider if there is any outstanding GST issues required
audit attention by performing the following procedures:
(a) Have all GST assessments been reflected in the accounts
(including penalties and interest)?
(b) Are all outstanding default surcharges reflected in the

accounts?
Client:
Year end:
APPENDIX 7 OTHER FINANCIAL INSTRUMENTS AND DERIVATIVES

1 Lead schedule
Audit programme – Other Financial
2
Instruments and Derivatives
List of other financial instruments and
3
derivatives
4 Fair value measurements
AUDIT PROGRAMME – OTHER FINANCIAL INSTRUMENTS AND DERIVATIVES
SUMMARY SHEET
I. AUDIT OBJECTIVES
To establish derivatives financial assets or liabilities are correctly recorded and accounted for at the end of the
1.
reporting period.
2. To establish the fair value of the financial instruments is correctly measured and recorded.
3. To establish impairment loss, if any, is properly accounted for during the period.
To establish that all necessary disclosures concerning derivative financial assets and liabilities are accurately
4.
made and that the information is appropriately presented and described in the financial statements.
Yes No Comments
1.
period? (B7)
2. Were there any disclosures deficiencies in prior period?
3.

5.
Are there any newly acquired shares, bonds or financial instruments
6. that do not give the entity the rights to control, jointly control or
exercise significant influence over the investee?
Are there significant additions or disposal of the financial assets

7.
during the period?
Are there any contracts that expose the entity to interest risk, foreign
8.
currency risk and or price risk?
Are there any hybrid contracts that may contain an embedded
9.
derivative that require recognition of a financial asset or liability?
Are financial instruments properly measured in accordance with the
10.
FRS?
Where the work of an expert is to be relied on for the following:

• application of specialised techniques to determine amounts; or
11.
the auditor is to complete one or both of the following supplementary
programmes:
Are there any indications that financial assets stated at cost or

12
amortised cost may be impaired?
Is there any credit loss expected from a contract asset, loan
13
commitment or a financial guarantee contract?
Are there any hedging contracts or arrangements that the entity
14
entered into to hedge a particular risk?
15
16 Are there any non-compliances with FRS in prior periods?
Assertions E R&O C V&A

L M
L 1.2 1.4
Financial Statement level risk
Financial Statement level risk M 1.4 1.8
H 1.6 2.1
Yes No
1. Step B
· Are there any newly acquired shares, bonds or financial instruments that do not give the entity the rights to control, jointly control or
exercise significant influence over the investee?
• Are there significant additions or disposal of the financial assets during the period?
2. Step C
· Are there any contracts that expose the entity to interest risk, foreign currency risk and or price risk?
3. Step D
· Are there any hybrid contracts that may contain an embedded derivative that require recognition of a financial asset or liability?
4. Step E
· Are financial instruments properly measured in accordance with the FRS?
5 Step F
· Are there any indications that financial assets stated at cost or amortised cost may be impaired?
· Is there any credit loss expected from a contract asset, loan commitment or a financial guarantee contract?
6 Step G
· Are there any hedging contracts or arrangements that the entity entered into to hedge a particular risk?
7 Step H
· Are there any contracts that expose the entity to interest risk, foreign currency risk and or price risk
· Are there any hybrid contracts that may contain an embedded derivative that require recognition of a financial asset or liability?
· Are there any hedging contracts or arrangements that the entity entered into hedge a particular risk?
· Is there any credit loss expected from a contract asset, loan commitment or a financial guarantee contract?
Date: Date:
AUDIT PROGRAMME – OTHER FINANCIAL INSTRUMENTS AND DERIVATIVES
If the entity has any financial instruments similar in nature or with the characteristics of those set out below then this programme
should be completed.
Interest rate swaps Cash or net share settleable derivates on own shares
Currency forwards/swaps Derivatives
Purchased/written options Embedded derivatives
Commodity contracts Loan commitments held for trading
Collars/caps Financial guarantees
Credit derivatives
The programme assumes a knowledge of the relevant accounting standards for financial instruments, it is not a step by step
guide and it should not be used as a substitute for reading the standards.
Results
WP ref satisfactory
Y/N
A. General
Obtain breakdown of payables and agree to general ledger
Establish that the financial instruments items agree to general ledger and supporting
details. The procedures include but not limited to:
Obtain and check, or prepare, a lead schedule for the current year's figures and
1
reconcile this to the general ledger.
Obtain detail listing of respective financial instruments items and agree total to lead
2
schedule.
3
Establish that financial instruments items are not materially misstated.
(a) comparison of the current figures with those of prior periods; and
Review for items above performance materiality or that are otherwise unusual and
5
verify.
B. Rights and obligations
Establish that entity has rights over the financial assets and obligations over the
financial liabilities arising from the instruments. The procedures include but not
limited to:
1 Inspect documents of title or agreements. Check that:
(a) details are correctly recorded including name, number of shares, type of shares
(or equivalent information if not share-based);
(b) the instrument is in the company name;

(c) where the company is not the registered owner such as where employees of the
company hold a nominee interests confirm:
- the company has a signed declaration from the said person stating that he/she
does not beneficially own the interest; and
- a blank signed share transfer form or equivalent exists.
(d) examine stamped bought and sold notes, stamped instruments of transfer or
other data supporting transactions such as brokers advices.
2 Vouch disposals to supporting documentation. Check that:
(a) sales proceeds have been correctly accounted for;
(b) profit/loss on disposal has been correctly computed; and
(c) transactions have been properly authorised.

3 Vouch additions to supporting documentation. Check that the initial recognition of
the financial asset or liability are properly accounted in the name of the company
and sight appropriate approval for such additions (e.g. Directors’ resolution or
signed minutes). Check that the:
(a) purchase price;
(a) company name; and
(c) nature of instrument has been documented and accounted for correctly.
4 Consider obtaining written confirmation where documents of title are held by a third
party.
C. Recognition
Establish that financial instruments are properly recognised and measured in
accordance with FRS.
1
Review the accounting treatment of all financial instruments and note whether they
are classified and recognised in accordance with applicable accounting standards.
2 Have financial assets been derecognised in the following circumstances:
(a) where the contractual rights to the future cash flows in relation to the
instruments expire;
(b) where the financial asset has been transferred and the transfer meets the criteria
for derecognition in accordance with applicable accounting standards; or
(c) the instrument has otherwise been sold or disposed of.

3 Where financial instruments have been transferred or re-classified consider whether
the accounting treatment is appropriate.
D. Embedded Derivatives
Establish that all embedded derivatives have been identified and properly accounted
for.
1 Review relevant contracts entered into by the company to check that all contracts
with financial instruments embedded in them are identified.
2
Confirm that where appropriate the embedded derivative has been separated from
the underlying host contract and accounted for separately.
3
Where the value of an embedded derivative that meets the criteria to be separated
from the host contract cannot be separately measured, confirm this has been
treated correctly in accordance with applicable accounting standards.
E. Measurement
Establish that fair value measurements and disclosures in the financial statements
are in accordance with FRS.
Obtain audit evidence about management's intent to carry out specific courses of
action, and consider its ability to do so, where relevant to the fair value
1
measurements and disclosures under the entity's applicable financial reporting
framework.
Consider:
(a) management’s past history of carrying
out its stated intentions with respect to
assets or liabilities;
(b) reviewing written plans and other

documentation, including, where
applicable, budgets, minutes, etc;
(c) management’s stated reasons for

choosing a particular course of action;
(d) management's ability to carry out a

particular course of action given the entity's
economic circumstances, including the
implications of its contractual
commitments; and
(e) the company's ability to hold a financial

instrument to maturity.
2
In respect of the fair value measurement of financial instruments, consider whether:
(a) management has sufficiently evaluated and appropriately applied the criteria, if
any, provided in the applicable financial reporting framework to support the selected
method;
(b) the valuation method is appropriate in the circumstances given the nature of the
asset or liability being valued and the entity's applicable financial reporting
framework; and
(c) the valuation method is appropriate in relation to the business, industry and
environment in which the entity operates
3 Evaluate whether the entity's method for its fair value measurements is applied
consistently.
4
Determine whether there is a need to use the work of an expert.
5 Make enquiries of management concerning the process for identifying fair value
accounting estimates and how such estimates are prepared (C5).
6 Evaluate the degree of estimation uncertainty associated with such fair value
accounting estimates; consider whether this gives rise to a high or medium risk and
document where appropriate.
7
Consider whether sufficient appropriate audit evidence has been obtained and
documented in relation to the fair value accounting estimates of financial
instruments as specified on C4, C5 and PAF1.1.
8 Consider whether there are any indications of management bias in making
accounting estimates.
9 Consider whether proper disclosures are made in accordance with applicable
accounting standards and that for high risk estimates there is adequate disclosure of
F. Impairment
Establish that any impairment of financial assets stated at cost is properly identified
and accounted for in the financial statements.
1 Consider whether there is any evidence that a financial instrument or group of
financial instruments may be impaired. Consider:
(a) significant financial difficulty of the issuer or obligor;
(b) a breach of contract, such as a default or delinquency in interest or principal
payments;
(c) the lender, for economic or legal reasons relating to the borrower’s financial
difficulty, granting to the borrower a concession that the lender would not otherwise
consider;
(d) it becoming probable that the borrower will enter bankruptcy or other financial
reorganisation;
(e) the disappearance of an active market for that financial asset because of
financial difficulties; or
(f) observable data indicating that there is a measurable decrease in the estimated
future cash flows from a group of financial assets since the initial recognition of
those assets, although the decrease cannot yet be identified with the individual
financial assets in the group.
2 Evaluate whether sufficient appropriate audit evidence has been obtained and
documented in relation to accounting estimates for impairment.
G. Hedge Accounting
Establish that all financial instruments that have been designated as hedging
instruments have been correctly accounted for in accordance with applicable
accounting standards.
1 Review the hedge documentation and confirm that each hedging relationship
satisfies the hedge accounting criteria in accordance with applicable accounting
standards. In particular:
(a) Was the hedge relationship designated and formally documented at inception?
(b) Is there evidence to demonstrate that both at inception and throughout the life of
the hedge that the hedge is expected to be 'highly effective'?
(c) Can the effectiveness of the hedge be measured reliably?
2 Was hedge accounting discontinued prospectively where any of the following
occurred?
(a) The hedge fails the effectiveness tests.
(b) The hedging instrument is sold, terminated or exercised.
(c) The hedged item is settled.
(d) The entity decides to revoke the hedge relationship.
(e) In a cash flow hedge, the forecast transaction that is hedged is no longer
expected to occur.
Establish that the required disclosure related to other financial instruments and
derivatives are properly disclosed in the financial statements.
1 Consider the need to complete the financial statements disclosure checklist relating
2 Consider the common key disclosure requirements/weakness relating to this
VI. CONCLUSION
Yes No NA Comments
1.
identified in C9.

2.
findings and results have been adequately documented.

3.

4.

5.

6.

opinion in A6.
Date: Date:
Ref:
APP7
Assertions
E, R&O, C, V
P&D
Comments
iderations represent
P&D
ertion level risk

H
1.6
2.1
2.5
Comments
riod?
ontrol, jointly control or
riod?
riod?
al asset or liability?
riod?
od?
asset or liability?
this programme
step by step
Initials and
date
Comments
If no, amend A3 or A8
accordingly.

consider the impact on the
emaining audit work as well

consider the effect on audit
opinion in A6.
Client: Ref:
Year end: APP8
AUDIT PROGRAMME – USING THE WORK OF MANAGEMENT'S EXPERT
This programme should be used where information to be used as audit evidence has been prepared using the work of
management's expert and the expert's work will be significant to the audit.
Results
Initials and
WP ref satisfactory?
date
(Y/N)
A. General
1. Determine whether, in obtaining an understanding of the company
and performing further procedures in response to assessed risks,
it may be necessary to obtain audit evidence in the form of
reports, opinions, valuations or statements of a management’s
expert.
2. Consider the absence or nature of other sources of audit evidence
available with regards to the item.
3. Evaluate the expert’s professional competence including the
professional qualifications, experience and resources:
(a) Enquire and verify as to the professional certification, licence

or membership in an appropriate professional body and if the
expert’s work is subject to technical performance standards or
other professional or industry requirements
(b) Enquire and verify as to the reputation and experience of the

management’s expert in the view of their peers and other familiar
with their ability and performance; and.
(c) Ascertain the relationship of management’s expert to the
company.
(d) Enquire on management’s expert’s competence with respect to
relevant accounting requirements, for example, knowledge of
assumptions and methods, including models where applicable,
that are consistent with the applicable financial reporting
framework.
4. Evaluate the objectivity of the management’s expert. For example

consider whether they are employed by the company; the level of
influence the company has over the expert; whether they are
related in some manner such as being financially dependent upon
the entity or being an investor.
5. Obtain sufficient appropriate audit evidence that the scope of the

expert's work is adequate for the purposes of the audit by
reviewing the terms of reference or other written instructions from
the company to the expert.
6. Evaluate the appropriateness of the expert's work as audit

evidence regarding the assertion being considered. Consider:
(a) the relevance and reasonableness of that expert's findings or

conclusions, and their consistency with other audit evidence, and
whether they have been appropriately reflected in the financial
statements;
(b) if the expert's work involves use of significant assumptions and

methods, the relevance and reasonableness of those assumptions
and methods in the circumstances;
(c) if the expert's work involves use of source data that is
significant to that expert’s work, the relevance, completeness, and
accuracy of that source data.
B. Conclusion
1. Consider whether sufficient appropriate audit evidence concerning
the work of management's experts has been obtained that is
adequate for the purposes of the audit.
2. Resolve matter where the results of the expert’s work do not

provide sufficient appropriate audit evidence, or if the results are
not consistent with other audit evidence.
3. Consider the necessity of obtaining the opinion of another expert,
or performing additional audit procedures with respect of the
expert’s assumptions if the expert is not independent of the
company.
4. Consider whether there are any points which need to be included

in a letter of representation (A3) or letter of comment (A8) as
appropriate
5. Review the planned extent of reliance on internal controls in this
area and consider whether this remains appropriate.
6. Assess whether the initial materiality and/or risk assessment

should be revised in view of the audit evidence obtained. Record
details of any necessary adjustments on A4. Consider the impact
on the remainder of the audit work and on any work undertaken to
date.
Date: Date:
Client: Ref:
Year end: APP9
AUDIT PROGRAMME – USING THE WORK OF AN AUDITOR'S EXPERT
Results
Initials and
WP ref satisfactory
date
(Y/N)
A. General
1 Determine whether, in relation to a field, other than
accounting or auditing, it may be necessary to obtain audit
evidence in the form of reports, opinions, valuations or
statements of an expert.
2 When planning to use the work of an auditor’s expert

evaluate whether the auditor’s expert has the necessary
competence, capabilities and objectivity for the required
purposes. The evaluation of objectivity must include
inquiry regarding interests and relationships that may
create a threat to that expert's objectivity.
3 Obtain an understanding of the field of expertise of the

expert sufficient to enable you to:
(a) determine the nature, scope and objectives of that
expert's work; and
(b) evaluate the adequacy of that work for audit purposes.
4 Agree, in writing, when appropriate, on the following

matters:
(a) the nature, scope and objectives of the expert's work;
(b) the respective roles and responsibilities of the auditor

and the expert;
(c) the nature, timing and extent of communication

between the auditor and the expert, including the form of
any report to be provided by the expert; and
(d) the need for the auditor's expert to observe

confidentiality requirements.
5 Evaluate the adequacy of the auditor's expert's work,

including:
(a) the relevance and reasonableness of that expert's
findings or conclusions, and their consistency with other
audit evidence;
(b) if the expert's work involves use of significant

assumptions and methods, the relevance and
reasonableness of those assumptions and methods in the
circumstances; and
(c) if the expert's work involves use of source data that is

significant to that expert’s work, the relevance,
completeness, and accuracy of that source data.
Results
Initials and
WP ref satisfactory
date
(Y/N)
6 If you determine that the work of the auditor’s expert is not
adequate for audit purposes:
(a) agree with the expert on the nature and extent of

further work to be performed by the expert; or
(b) perform additional audit procedures appropriate to the
circumstances.
7 No reference should be made to the work of the expert in

the audit report unless required by law or regulation or to
enhance understanding of a modified audit opinion. If
reference is made in the auditor’s report to the work of the
expert, indicate in the auditor’s report that the reference
does not reduce the primary auditor’s responsibility for the
audit opinion.
B. Conclusion
1 Consider whether sufficient appropriate audit evidence
concerning the work of the auditors expert has been
obtained that is adequate for the purposes of the audit.
2 Consider whether there are any points which need to be

included in a letter of representation A3 and/or letter of
comment A8 and record as appropriate.
3 Assess whether the initial materiality and/or risk

assessment should be revised in view of the audit
evidence obtained. Record details of any necessary
adjustments on A4. Consider the impact on the remainder
of the audit work and on any work undertaken to date.
Date: Date:

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Client:

PAF PERMANENT AUDIT FILE INDEX

2 Details of Significant Assets

3. Significant Long-Term Contracts and Agreements

Review of updates to PAF

Year File updated by

Client and/or Engagement acceptance considerations

A. Anti-money laundering consideration

2. Is the Client Risk Rating in PAF1.1 Section E classified as Low/Normal?

(b) For High Risk engagements, have we completed enhanced CDD?

3. Have we obtained all information on understanding of the entity?

C. Independence - Conflict of interest

Specify reason: ________________________________

Prepared by: Reviewed by:

Prepared by: Reviewed by:

· The engagement risk classification is: Low / Normal / High.

Second partner conclusion (where applicable)

Affects risk at overall FS, or Assertions Financial Statements account

ngagement have been followed, and

ptance of the client relationship and audit engagement.

ancial Statements accounts

Guidance Template - CLIENT AND/OR ENGAGEMENT ACCEPTANCE CONSIDERATIONS

a. Any situation where personal identity is difficult to determine;

b. Introduction of a client by an overseas associate or financial

Yes No N/A Comments

· Client does not want correspondence sent to home address.

· Client uses a post office box or general delivery address, or

ablish that a transaction

(b) The “Terrorist Alert List” on the ISCA website; or

and the exceptions cannot be disposed of satisfactorily.

There is suspicion of money laundering and/or terrorist financing.

SECTION B: CLIENT’S RISK FACTORS

Are there adverse news or information arising?

Is the client in a high-risk industry[1]?

Where applicable, do the nominee shareholders represent majority ownership?

Is the client a shell company?

Is the client’s business cash-intensive?

SECTION C: COUNTRY / TERRORITY RISK FACTORS

SECTION D: SERVICES / TRANSACTIONS RISK FACTORS

This would include:

· Multi-layer, multi-country and complex group structures.

SECTION E: CLIENT RISK RATING

Low – Normal CDD

Normal – Normal CDD

High – Enhanced CDD

Document reasons for client risk rating:

Accept client

Reject client

ionship with the client.

FOR NATURAL PERSONS/SOLE PROPRIETORSHIPS ONLY

Residential street address:

Address of principal place of

Intended nature and purpose

Additional information required

What country is your business based in?

What type of products does your business sell or

Any further details:

Verification (for office use)

FOR LEGAL PERSONS ONLY

Full legal name of registration: