CY 2016 COA Annual Audit Report.pdf - Republic oJ the...

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Republic oJ the Philippines COMMISSION ON AUDIT Commorut:ealth Auenue . Quezon CitA , Philippines INDEPENDENT AUDITOR'S REPORT THE BOARD OF DIRECTORS Philippine Ports Authority Bonifacio Drive Port Area, Manila Repott on the Financial Statements We have audited the accompanying financial statements of the Philippine Ports Authority (PPA), $fiich comprise the statement of financial positon as at December 31,2016 and 2015, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the years then ended, and a summary of signilicant accounting policies and other explanatory information. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Philippine Financial Reporting Standards, and for such intemal control as Management determines is necessary to enable the preparation of financial stalements that are free from material misstatement, whether due to fraud or error. Auditor's Respon sibility Our responsibility is to express an opinion on these financial slatements based on our audit. We conducted our audit in accordance with the Philippine Public Sector Slandards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obiain reasonable assurance about whether the financial statements are ftee from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disdosures in the financial statements. The procedures selected depend on the auditor's judgment, induding the assessment of the risks of material missiatement of the financial statements, whether due to fraud or eror. ln making those risk assessments, the auditor considers intemal control relevant to the entity's preparation and fair presentatbn of the financial statements in order to design audit procedures that are appropriate in the circumslances, bul not for the purpose of expressing an opinion on the effectiveness of the entity's intemal control. An audit also includes evalualing the appropriateness of accounting policies used and the reasonableness of accounting estimales made by Managernent, as well as evaluating the overall presentation of the financial slatements.
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we believe that the audit evidence ure oblained is sufficient and appropriate to provide a basis for our qualified audit opinion. Basis for Qualitied Opinion The accumulated mst of construction in Progress (ClP) amounting to P3.616 billion and P2.722 billion as of December 3'f , 2016 and December 31, 2015, respectively was underslated with the recognition of lnput Value Added Tax (vAT) as separate expense item instead of capitalized part of the carrying cost of clP which was not in conformity with the matching of cost and revenue principle and not in uniformity with the accounting treatnient by other GOCCs.
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