verification would be required to ensure the extent of internal controls in this regard. In addition, it was decided that reliance cannot be put on internal controls as there is a high risk of management override and collusion. It was discussed and decided that due to close monitoring of assets and inventory from Head Quarters, it would be difficult to misappropriate material assets and inventories. Furthermore, vehicle logbooks are checked to assess usage of vehicles. Therefore, the risk of misappropriation of assets is low. 7.3 Related party relationships and transactions including plans to obtain sufficient appropriate evidence According to discussion with the management, procurement is made from vendors referred by personnel in other Red Cross / Red Crescent societies. Therefore, there is a risk that the transaction taking place may not be at arm’s length. It was decided that we can check quotations and comparative statements as well as contact vendors to check the prices and products procured to assess whether the transaction was at an arm’s length[ CITATION Int183 \l 1033 ].
7.4 Significant accounting estimates It was discussed that, as per initial understanding, no significant accounting estimates are made. 7.5 Reporting We shall issue an audit opinion in the form of report, stating whether the financial statements under audit are free from material misstatement or error. Along with that we shall also issue a management letter highlighting weaknesses and gaps observed in design and implementation of internal controls of the organization. 8 Outline of Fees The audit fee charged is $400,000 excluding out of pocket expenses. 9 The Team Our team shall comprise of one audit supervisor, two audit seniors and four audit associates. Audit manager shall carryout work review on timely basis; while one final review shall be conducted by the Engagement partner. A quality assurance review shall be carried out by an independent partner as well.
10 Appendix – Results of Analytical Review 10.1 Annexure 1 - Budgeted v/s Actual analysis Account Budget Actual Variance Management comments Code Name $ $ $ %age 46 Funds to International Programs 31,000 26,676 4,324 16% Program activities in Myanmar were halted for 6 months due to political instability in the country. 31 Program Support Cost 4,700 4,700 0 0% No major variance 59 Other personnel costs 15,000 21,200 -6,200 -29% House-rent for delegates included in the Actual costs, not in the budget where it is included in account 5000, Delegate Costs. 61 Freight and transport costs 3,000 5,373 -2,373 -44% Shifting of ERU equipment donated to ARCS from Sydney to South Australia not included in the budget for 2017 63 Costs related to premises 80,000 79,321 679 1% No major variance 64 Rental of machinery, fixtures, fittings 35,000 39,039 -4,039 -10% Land Cruicer rented from IFRC starting from 1 July 2012 not included in the budget. Rent paid directly from Head Quarters to IFRC 65 Tools, fixtures, fittings and op mtr.
- Fall '09
- Balance Sheet