Review Checklist
Checklist for Review of Audit Engagements
Contents
Section
I. General Audit Planning Procedures
Client and Engagement Acceptance and Continuance
Client Understanding
Audit Planning
Fraud Considerations
Information Technology Considerations
Group Audits
Work Performed by a Component Auditor
Auditor's Specialist, If Used
Internal Controls and Control Risks
Service Auditor Reports
Related Party Transactions
Audit Plan
II. Audit Areas
Highest Risk Audit Areas
Cash
Receivables
Inventories
Investments in Securities, Derivative Instruments, and Hedging Activities
Prepaid Expenses and Deferred Charges, etc.
Intangible Assets and Goodwill
Property, Plant, and Equipment
Liabilities
Deferred Credits
Income Taxes
Commitments and Contingencies
Capital Accounts.
Revenue
Expenses
Business Combinations and Consolidations
III. General Audit Procedures
Audit Sampling
Substantive Analytical Procedures
Material Accounting Estimates
Representation Letters
Compliance With Laws and Regulations
Going Concern Considerations
Section
Communication of Internal Control Related Matters
Subsequent Events
IV.
V.
VI.
Explanation of References:
PFRS for
SMes
Philippine Financial Reporting Standards for SMEs
PSA
CoE
PSCQ
ENGAGEMENT PROFILE
Engagement Code No.
Office
Owner/Partner
Manager
Engagement Quality Control Reviewer
This engagement involves reporting on
financial statements (single entity)
consolidated financial statements
combined financial statements
subsidiary, division, or branch
Is this engagement part of a group audit? Yes
special report
significant deficienciesmaterial weaknesses
other (explain)
No
No
At the time the report or financial statement(s) on the clients current year was issued or released, were there billed or
unbilled fees, or note(s) receivable arising from such fees, that remained unpaid for any professional services
provided more than one year prior to the date of the report? Yes
No
Key data reported on by this office for this engagement:
Total assets
Equity
Net sales
Net income
Major lines of business:
List any non attest services [CoE Section 290] performed for the client during the period of the professional
engagement or the period covered by the financial statements:
Personnel Continuity:
Owner
or
Partner
Manager
or
Equivalent
To determine the applicability of all cross-referenced pronouncements, consider their effective dates.
Prior to
Commencement
of Field Work
During
Field Work
After
Completion of
Field Work
Owner or Partner
Engagement Quality Control Reviewer
Manager (or equivalent)
Senior/Other Professionals
Total Hours
Describe the engagement teams experience and training relevant to this engagement.
Summarize key factors the engagement team considered with regard to the entity, its environment, fraud
risk factors, entity level controls, and how this affected the audit approach.
2.
What are the two to three areas with the highest risk of material misstatement in the financial statements?
Reviewer Signature
Notes: This is a highly summarized checklist. Reviewers may wish to consult the professional standards cited for
detailed information about the requirements. Bullet points are generally batched into one question on this
checklist. The reviewer should weigh each bullet point separately and in the aggregate when concluding
whether the professional standards requirement was met in all material respects. All No answers must be
thoroughly explained.
Complete any applicable supplemental checklists for specialized industries and areas in addition to this
checklist.
N/A
Yes
No
Ref.
A101
A102
If the auditor succeeded another auditor, did the successor auditor initiate communications with the predecessor auditor to ascertain whether
there were matters that might assist the auditor in determining whether
to accept the engagement? [PSA 210.13]
A103
Did the successor auditor obtain sufficient appropriate audit evidence regarding opening balances about whether opening balances contain misstatements that materially affect the current periods financial statements
and appropriate accounting policies reflected in the opening balances
have been consistently applied? [PSA 510.05-09] Also consider the
following:
A104
A105
Did the member establish and document in writing his or her understanding with the client with regard to specific criteria relating to
nonattest services? [CoE 290.46 - 47] [PSQC 20-25]
A106
A107
Were all fees, billed or unbilled, or note(s) receivable arising from such
fees for any professional services provided more than one year prior to
the date of the report paid prior to the issuance of the report for the current engagement? [CoE Sec. 110-150] [PSQC 20-25]
A108
A109
A110
The N/A column should be used when the item either does not exist or is not material.
All No answers should be handled in either of the following ways: (1) discussed on a Matter for Further Consideration (MFC) form with the
MFC form number noted in the Ref. column or (2) discussed on the pages provided at the end of this checklist if no MFC form was generated.
Client Understanding:
Did the auditor establish the agreed-upon terms of the audit engagement,
which should be documented in an engagement letter or other suitable
form of written agreement? The agreement should include the following:
[PSA 210.10]
The objective and scope of the audit of the financial statements.
[PSA 210.10a]
The responsibilities of the auditor. [PSA 210.10b]
Yes
No
A111
A112
Ques.
establish an overall audit strategy that sets the scope, timing, and
direction of the audit and that guides the development of the
N/A
Yes
a
u
d
i
t
Ref.
Did the auditor document the overall audit strategy, the audit plan, and
any changes made during the audit engagement to the overall audit strategy or the audit plan and the reasons for such changes? [PSA 300.11]
Did the auditor consider, prior to the auditors identification and assessment of the risks of material misstatement, such matters as the following: [PSA 300.A3]
The analytical procedures to be applied as risk assessment
procedures?
A general understanding of the legal and regulatory framework
applicable to the entity and how the entity is complying with
that framework?
The determination of materiality?
No
A113
A114
A115
Ques.
Fraud Considerations:
Ref.
N/A
Yes
No
Ref.
Ques.
N/A
Yes
I
d
e
n
t
i
Did the auditor properly identify and document the linkage between further audit procedures (test of controls and/or substantive procedures) and
the IT risk assessment? [PSA 330] This could include the following:
The auditor documented the understanding of the entity and its
environment. [PSA 315]
The auditor, using a specialist if necessary, used a professional
possessing IT skills to determine the effect of IT on the audit, to
understand the IT controls, or to design and perform tests of IT
controls or substantive procedures.
Group Audits:
Did the auditor appropriately identify the audit as being a group audit
based on the existence of components at the appropriate level of aggregation? [PSA 600.A2.A4]
No
A118
A119
Ref.
Ques.
Did the group audit team establish an overall group audit strategy and
develop an overall group audit plan? Was the plan approved by the
group engagement partner? [PSA 600.15.16]
A122
Did the auditor obtain an understanding of the entity, including groupwide controls and an understanding of the consolidation process? [PSA
600.17-18]
A123
A124
Did the group engagement team perform proper procedures related to the
consolidation process in response to the assessed risks of material misstatements of the group financial statements? [PSA 600.32-37]
A125
A126
A127
N/A
Yes
No
Ref.
Ques.
A129
Yes
No
N/A
Ref.
Ques.
A132
A133
N/A
Yes
No
Ref.
Highest Risk
Audit
Areas1
(1)
Adequate
Audit Risk
Identification?
(2)
Yes
No
Adequate
Planned Audit
Response?
(3)
Yes
Yes
No
No
Audit Area
Cash
Receivables
Inventories
Investments, Derivatives,
and Hedging Activities
Prepaid Expenses and
Deferred Charges
Intangible Assets
(Including Goodwill)
Property, Plant, and Equipment
Liabilities
Deferred Credits
Income Taxes
Commitments and Contingencies
Capital Accounts
Revenue
Expenses
Business Combinations and
Consolidations
If any No answers are identified in the preceding matrix for which a Matter for Further Consideration
(MFC) form was not generated, include an explanation in Section V, Explanation of No Answers and Other
Comments.
Review the work performed in the highest risk audit areas identified in the matrix and complete only those sections of
the subsequent checklist. In the audit areas reviewed, indicate whether the reviewed firm has obtained sufficient
competent evidential matter to form conclusions concerning the validity of the assertions of material significance
embodied in the financial statements as described in PSA section 500, Audit Evidence.
Ques.
N/A
Yes
No
Ref.
Cash
Selected audit area
Does the audit documentation indicate that the following were considered? [PSA 500, 505, 230]
A201
A202
A203
Was adequate work performed and documented to support the conclusions about this audit area?
A204
Receivables
Selected audit area
Were accounts receivable confirmed and appropriate follow-up steps
taken, including second requests and alternative procedures? [PSA
505.07 and .10.14]
A205
A206
A207
A208
A209
A210
The N/A column should be used when the item either does not exist or is not material.
All No answers should be handled in either of the following ways: (1) discussed on a Matter for Further Consideration (MFC) form with the
MFC form number noted in the Ref. column or (2) discussed on the pages provided at the end of this checklist if no MFC form was generated .
Ques.
Was collateral (if any) for receivables tested with respect to existence,
ownership, and value?
A211
N/A
Yes
Is there evidence in the audit documentation that inquiry was made and
consideration given to whether receivables are sold, pledged, assigned, or
otherwise encumbered?
Was receivable work coordinated with the tests of revenue, including cutoff tests?
Was adequate work performed and documented to support the conclusions about this audit area?
No
A214
Ref.
A215
A216
Inventories
Selected audit area
Did the auditor apply appropriate procedures with respect to inventory?
Consider the following:
A217
When the physical inventory counting is conducted at a date other
than the date of the financial statements, does the audit
documen-tation provide evidence that changes in inventory
between the count date(s) and the date of the financial
statements were recorded correctly? [PSA 501.05]
Does the audit documentation contain evidence that the auditor
attended physical inventory counting, unless Impracticable, and
performed audit procedures over the entitys final inventory
records to determine whether they accurately reflect actual
inventory count results? [PSA 501.04]
If the auditor is unable to attend physical inventory counting due
to unforeseen circumstances, did the auditor make or observe
some physical counts on an alternative date and perform audit
procedures on intervening transactions? [PSA 501.06]
When physical inventory in the hands of others was not observed,
were inventory confirmations received or other appropriate
procedures performed (for example, inventory in public
warehouses, on consignment)? [PSA 501.08]
If perpetual inventory records are maintained, does the audit documentation indicate that differences disclosed by the physical inventory (or cycle counts) are properly reflected in the accounts?
[PSA 501.A09-A10]
Does the audit documentation indicate that there were adequate
tests of
the clerical accuracy of the inventory?
costing methods and substantiation of costs used in pricing all
elements (raw materials, work in progress, finished goods) of
the inventory?
inventory valuation, (for example, lower of cost or market, first
in, first out, last in, first out) (including consideration of
obsolete or slow-moving inventory)?
were the results of inventory observations and other tests
summarized, and were appropriate conclusions drawn?
Ques.
Were inquiries concerning purchase and sales commitments made, including consideration of any possible adverse effects?
A218
A219
A220
Was adequate work performed and documented to support the conclusions about this audit area?
A221
N/A
Yes
No
consider factors that affect the risk that the misstatements would
be material to the financial statements? [PSA 315.25]
design tests of controls, when applicable, and design substantive
tests? [PSA 330.06-07]
For derivative instruments and securities measured at fair value, consider
the following:
A223
Ques.
A224
N/A
Yes
f
i
n
a
n
c
i
n
g
,
d
i
d
A225
A226
a
u
d
i
Ref.
A227
Was adequate work performed and documented to support the conclusions about this audit area?
A228
A229
A231
No
A233
Ref.
Have leases been reviewed to determine that capital, operating, sales, and
direct financing leases have been properly accounted for? [PFRS for SMEs
Sec. 2, Leases]
A234
Was adequate work performed and documented to support the conclusions about this audit area?
Liabilities
Selected audit area
A235
N/A
Does the audit documentation indicate that the auditor reviewed compliance with the covenants of the enterprises debt obligations?
A241
Was adequate work performed and documented to support the conclusions about this audit area?
A242
Yes
No
Ref.
Yes
No
Ref.
Deferred Credits
Selected audit area
Does the audit documentation indicate that deferrals have been established on a reasonable basis and consistently applied?
A243
Was adequate work performed and documented to support the conclusions about this audit area?
A244
A245
A246
A247
A248
A249
Ques.
A250
A251
A252
A253
Capital Accounts
Selected audit area
Were changes in capitalization checked to authorizations?
If applicable, was confirmation received from the registrar, or was
examination made of stock certificate records?
Does the audit documentation indicate that there were adequate
inquiries and review of applicable documents, if necessary,
regarding stock options, warrants, rights, redemptions, and
conversion
A254
A255
N/A
privileges?
Was adequate work performed and documented to support the conclusions about this audit area?
A256
A257
Revenue
Selected audit area
Were appropriate analytical procedures used in substantive tests of revenue and expenses for the period? [PSA 520]
A258
Was revenue properly recognized and reported? [PFRS for SMEs, Sec 23,
Revenue
Recognition] Consider the following:
A259
The clients revenue recognition policy [PFRS for SMEs Sec 23.8-23.29]
Income recognition on transactions in which the earnings process
was not complete
Unusual sales transactions
Income recognition when the right of return exists [PFRS for
SMEs, Sec. 23.12]
Were substantive analytical procedures performed on revenue using disaggregated data? [PSA 520.A15]
A260
Was adequate work performed and documented to support the conclusions about this audit area?
A261
Expenses
Selected audit area
Were tests of payrolls, including account distribution, made when appropriate?
A262
Ques.
Do the tests of the pension and profit-sharing (including the effects of the
Employee Retirement Income Security Act of 1974) expenses and liabilities appear adequate? [PFRS for SMEs, Section 28, Employee Benefits]
A263
If substantive analytical procedures were performed on revenue, was the
analysis based on disaggregated data to gain greater precision, as appropriate? [PSA 520.A15]
A264
Was adequate work performed and documented to support the conclusions about this audit area?
A265
A266
A267
A268
N/A
Yes
No
Ref.
A269
Was adequate work performed and documented to support the conclusions about this audit area?
A270
Audit Sampling:
Did the auditor consider the following, with regard to audit sampling:
The purpose of the audit procedure, and the characteristics of the
population from which the sample will be drawn, when
designing the audit sample? [PSA 530.06]
Did the auditor determine the sample size sufficient to reduce
sampling risk to an acceptably low level? [PSA 530.07]
Did the auditor select items for the sample in such a way that the
auditor can reasonably expect the sample to be representative of
the relevant population and likely to provide the auditor with a
reasonable basis for conclusions about the population? [PSA
530.08]
If the auditor was unable to apply the designed audit procedures,
or suitable alternative procedures to a selected item, was the
item treated as a deviation from the prescribed control (in the
case of tests of controls) or a misstatement (in the case of tests
of details)? [PSA 530.11]
Did the auditor project the results of audit sampling to the
population? [PSA 530.14]
Did the auditor evaluate the results of the sample, including
sampling risk, and whether the use of audit sampling has
provided a reasonable basis for conclusions about the
population that has been tested? [PSA 530.15]
A301
Yes
No
Ref.
A302
The N/A column should be used when the item either does not exist or is not material.
All No answers should be handled in either of the following ways: (1) discussed on a Matter for Further Consideration (MFC) form with the
MFC form number noted in the Ref. column or (2) discussed on the pages provided at the end of this checklist if no MFC form was generated.
Ques.
d
i
s
c
l
o
s
u
r
e
s
.
N/A
[
P
S
A
5
4
0
.
0
8
a
]
H
o
w
Yes
Ques.
N/A
Yes
No
b
e
l
i
e
v
e
s
t
h
e
e
f
f
e
c
t
s
o
f
u
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c
o
r
r
e
c
t
e
d
Ref.
A305
A306
If the auditors procedures disclosed instances or indications of noncompliance with laws and regulations, did the auditor apply procedures and
evaluate the results of those procedures in accordance with professional
standards? [PSA 250] Consider the requirements for the auditor to
A307
No
Ref.
Ques.
A308
If the auditor believed that there was substantial doubt about the entitys
ability to continue as a going concern for a reasonable period of time, did
the auditor perform appropriate procedures? Consider if
The auditor shall consider whether there are events or conditions that may
cast significant doubt on the entitys ability to continue as a going concern.
Consider if:
A309
the auditor obtained information about managements plans that
are intended to mitigate the effect of such conditions or events
and evaluate the likelihood that such plans could be
implemented effectively. obtained information whether the
management has already performed a preliminary assessment of
the entitys ability to continue as a going concern [PSA 570.07
10]
if such assessment has been made, the auditor shall discuss
with the management and determine whether the management as
identified events or conditions that, individually or collectively,
may cast significant doubt of the entitys ability to continue as a
going concern, and of the management plans to address them;
if such assessment has not yet been performed, the auditor
shall discuss with management the basis of for the intended use of
the going concern assumption, and inquire of management
Whether conditions or events exist that, individually or
collectively, may cast significant doubt of the entitys ability to
continue as a going concern.
N/A
Yes
No
Ref.
Ques.
A310
managements plans that are intended to mitigate the adverse
effects of conditions or events that indicate there is substantial
doubt about the entitys ability to continue as a going concern
for a reasonable period of time and the likelihood that those
plans can be effectively implemented, and
a statement that the financial statements disclose all the matters of
which management is aware that are relevant to the entitys
ability to continue as a going concern, including principal
conditions or events and managements plans?
Yes
N/A
T
h
e
p
u
r
p
o
s
e
A311
o
f
t
h
e
a
u
d
i
t
w
a
s
t
o
e
x
p
r
No
Ref.
a
d
e
s
c
r
i
p
t
i
o
n
o
f
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e
d
e
f
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i
e
s
a
n
d
e
x
p
l
a
n
a
t
i
o
n
o
f
Subsequent Events:
Did the auditor consider information and apply appropriate professional
guidance with respect to events occurring subsequent to the date of the
audit report? [PSA 560] Consider the following:
A313
N/A
i
n
t
e
r
n
a
l
c
o
n
t
r
o
l
t
h
a
t
h
a
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e
c
o
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e
t
o
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e
a
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i
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o
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s
a
t
t
Yes
No
Ref.
U
n
c
o
r
r
e
c
t
e
d
m
i
s
s
t
a
t
e
m
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t
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a
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e
f
f
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e
y
m
a
y
No
Ques.
N/A
Yes
Ref.
Ques.
who performed the audit work and the date such work was
completed, and [PSA 230.09b]
who reviewed the audit work performed and the date and extent of such review. [PSA 230.09c]
For audit procedures related to the inspection of significant contracts or agreements, the auditor should include abstracts or copies of those contracts or agreements in the audit documentation.
[PSA 230 A3]
The auditor should document discussions of significant findings
or issues with management, those charged with governance, and
others, including the nature of significant findings or issues discussed and when and with whom the discussions took place.
[PSA 230.10]
If the auditor departs from a presumptively mandatory PSA
requirement, the auditor documented the justification for the
departure and how other procedures performed in the
circumstances were sufficient to achieve the intent of that
requirement. [PSA 230.12]
If the auditor performs new or additional audit procedures or
draws new conclusions after the date of the auditors report, the
auditor should document the circumstances encountered; the
new or additional procedures performed, audit evidence
obtained, and conclusions reached, and their effect on the
auditors report; and when and by whom the resulting changes
to audit documentation were made and reviewed. [PSA 230.13]
The auditor should document the report release date in the audit
documentation.
The auditors documentation was consistent with the assembling
of the engagement documentation file and completion of the
administrative process of assembling the audit file on a timely
basis, no later than 60 days following the report release date.
[PSA 230.14]
The auditors documentation established reasonable procedures
for retention of, and access to, audit documentation for a period
of at least five years. The auditor shall not delete or discard
audit documentation of any nature before the end of its retention
period [PSA230.15, PSQC 47]
If the auditor finds it necessary to modify existing audit
documentation or add new audit documentation after the
documentation completion date, the auditor should document
the specific reasons for making the change and when and by
whom they were made and reviewed. [PSA 230.16]
The auditor should adopt reasonable procedures to maintain the
confidentiality of client information.
A record of the significant changes to the overall strategy and
audit plan and resulting changes to the planned nature, timing,
and extent of audit procedures explain why the significant
changes were made and why the overall strategy and audit plan
were finally adopted for the audit. It also reflects the appropriate
response to the significant changes occurring during the audit.
[PSA 300.A19]
N/A
Yes
No
Ref.
No
Ques.
A316
For the engagement, did the personnel adequately complete all forms,
checklists, or questionnaires, if applicable, required by firm policy for
the following areas? [PSQC 3247 and PSQC A32.A63]
A317
Work program
If standardized forms were not used for any of the preceding areas, is
there adequate documentation of these areas? [PSQC 3247 and PSQC
A32.A63]
A318
Were the firms guidelines for the form and content of working papers
complied with? [PSQC 3547 and PSQC A32A63]
A319
Ref.
N/A
Yes
N/A
A320
Did the engagement partner take responsibility for reviews being performed in accordance with the firms review policies and procedures?
[PSA 220.16]
A321
A322
A323
Did the auditor determine whether uncorrected misstatements were material, either individually or in the aggregate? The auditor should consider
the following: [PSA 450.11]
A324
The size and nature of the misstatements, both in relation to
particular classes of transactions, account balances, or disclosures
and the financial statements as a whole, and the particular
circumstances of their occurrence
The effect of uncorrected misstatements related to prior periods
on the relevant classes of transactions, account balances, or
disclosures and the financial statement as a whole
Ques.
Does it appear (lack of contrary evidence) that the firm established poli-
A325
A326
A327
Were the engagement teams audit hours reasonable for this engagement
(including prior to commencement of field work, during and after completion of field work)?
A328
Yes
No
Does it appear that the practitioner in charge of the engagement possessed the following knowledge, skills, and abilities (competencies) to
fulfill their responsibilities on the engagement, including an understanding of the following: [PSQC A18A21 and PSQC A30A35]
A329
The performance, supervision, and reporting aspects of the
engagement?
The applicable accounting, auditing, or attestation professional
standards, including those standards directly related to the
industry in which a client operates?
The industry in which a client operates, including the industrys
organization and operating characteristics, to identify the areas
of high or unusual risk associated with an engagement and to
evaluate the reasonableness of industry specific estimates?
The skills that indicate sound professional judgment?
How the organization is dependent on, or enabled by, information
technologies and the manner in which information systems are
used to record and maintain financial information?
If required by firm policy, was the staff on this engagement appropriately
evaluated? [PSQC 10.A28.A29]
A330
A332
A333
Ques.
N/A
Yes
I
f
a
n
i
n
d
i
v
i
d
Ref.
No
Ref.
Yes
No
Ref.
A401
A402
Draft
N/A
A403
A404
A405
A406
A407
A408
A409
The N/A column should be used when the item either does not exist or is not material.
All No answers should be handled in either of the following ways: (1) discussed on an MFC form with the MFC form number noted in the
Ref. column or (2) discussed on the pages provided at the end of this checklist if no MFC form was generated.
N/A
Yes
fulfill their responsibilities on the engagement including an understanding of the following: [PSQC A25A27 and PSQC A30A31]
The role of the firms system of quality control and the PSA
Code of Professional Conduct
A411
job progressed?
A412
A414
Work program
Disclosure and reporting checklist
Working paper and financial statement reviews
If standardized forms were not used for any of the above areas, is there
adequate documentation of these areas?
A415
Were the firms guidelines for the form and content of working papers
complied with?
A416
If required by firm policy, was an appropriate pre-issuance review completed and documented?
A417
Were the firms guidelines for the performance of an Engagement Quality Review complied with?
A418
No
Ref.
Ques.
Were any circumstances noted where the firm consulted or should have
consulted regarding an engagement matter (that is, a complex, unusual,
or a technical issue) with individuals within the firm, an external party, or
by researching in applicable professional literature based on the firms
policies and procedures or where the complexity or nature of the issue
warranted consultation? Consider
if an individual was consulted (internally or externally), was the
consultation done on a timely basis and does it appear they were
aware of all relevant facts and circumstances?
if professional literature was researched, does it appear the
research was thorough and the sources consulted were
complete, correct, and up-to-date?
does it appear that the person(s) consulted (internally or
externally) or the individual(s) performing the research, or both,
had an appropriate level of knowledge, competence, judgment,
and (if applicable) authority?
based on the facts and circumstances, were the firms conclusions
reasonable and consistent with professional standards?
is the firms report the financial statements, or other information
affected by the matter consistent with the results of the consultation?
A419
N/A
Yes
No
Ref.
Auditors Report:
Is the report dated in conformity with the requirements of professional
standards? [PSA 700.41]
Yes
No
Ref.
A401
The audit report should be dated no earlier than the date on which
the auditor has obtained sufficient appropriate audit evidence on
which to base the auditors opinion on the financial statements,
including evidence that
the audit documentation has been reviewed;
all the statements that the financial statements comprise,
including the related notes, have been prepared; and
management has asserted that they have taken responsibility
for those financial statements.
Does the report appropriately include the basic elements required under
professional standards, and is appropriate language used for modifying
the report in the circumstances described in such standards? [PSA
700.2041 and PSA 705] The report should
be in writing. [PSA 700.22]
A402
The N/A column should be used when the item either does not exist or is not material.
All No answers should be handled in either of the following ways: (1) discussed on a Matter for Further Consideration (MFC) form with the
MFC form number noted in the Ref. column or (2) discussed on the pages provided at the end of this checklist if no MFC form was generated.
No
Ques.
Does the report include all the required elements for a special purpose
financial statement? [PSA 800] Consider the following:
The explanation of managements responsibility should also
make reference to its responsibility for determining that the
applicable financial reporting framework is acceptable in the
circumstances, when management has a choice of financial
reporting frame-works in the preparation of such financial
statements. [PSA 800.13b]
The report should describe the purpose for which the financial
statements are prepared or refer to a note that contains that information, when the financial statements are prepared in accordance with a regulatory or contractual basis of accounting. [PSA
800.18a]
Professional standards have been properly complied with for reports on single financial statements and specific elements. [PSA
805]
If the special purpose financial statements are not prepared in
accordance with a regulatory basis of accounting intended for
general use special purpose framework, then the report should
include an emphasis-of-matter paragraph under an appropriate
heading that indicates that the financial statements are prepared
in accordance with the applicable special purpose framework,
refers to the note to the financial statements that describes that
framework, and states that the special purpose framework is a
basis of accounting other than gener-ally accepted accounting
principles as a result, the financial statements may not be
suitable for another purpose. [PSA 800.14]
If the auditor is required by law or regulation to use a specific
layout, form, or wording of the auditors report, the auditors
report should contain the minimum elements required by PSA.
If the financial statements of a prior period are presented and have been
audited by a predecessor auditor whose report is not presented, and the
predecessor auditors report on the prior periods financial statements is
not reissued, has the successor auditor included the appropriate reference
to the predecessor auditor in another-matter paragraph? [PSA 710.13]
If the entity presents supplementary information with the financial
statements, does the auditor report on the supplementary information in
either (1) an explanatory paragraph in accordance with PSA section 706
706, Emphasis-of-Matter Paragraphs and Other-Matter Paragraphs in
the Independent Auditors Report (Professional Standards), or
(2) in a separate report on the supplementary information? The othermatter paragraph or separate report should include the following elements:
A statement that the audit was conducted for the purpose of
forming an opinion on the financial statements as a whole.
A statement that the supplementary information is presented for
purposes of additional analysis and is not a required part of the
financial statements.
A statement that the supplementary information is the
responsibility of management and was derived from, and relates
directly to, the underlying accounting and other records used to
prepare the financial statements.
A403
A404
A405
N/A
Yes
Ref.
Ques.
A406
N/A
Yes
No
Ref.
What is the systemic cause, if any, of the matters identified, including your discussion with the engagement partner or
owner and his or her view of the cause of the matters?
VI. CONCLUSIONS
Explain subsequently the reasons for any Yes answers. BE SPECIFIC.
Based on the work performed, did anything come to your attention that caused you to believe that
the firm did not perform the engagement, in all material respects, in accordance
with auditing standards generally accepted in the Philippines, including doc
YES#
NO
NO
appropriately modified?
the practitioner in charge of the engagement did not have the knowledge, skills,
and abilities (competencies) to perform the engagement in accordance with pro-
YES#
NO
fessional standards?
the firm did not comply with its policies and procedures on this engagement in
YES#
NO
YES#
NO
YES
If this question is answered Yes, see additional guidance contained in Interpretations 66-1 and 67-1, Concluding on the Review of an
Engagement.
2
The cash, tax, regulatory, and other bases of accounting that utilize a definite set of logical, reasonable criteria that is applied to all material items
appearing in the financial statements are commonly referred to as other comprehensive bases of accounting.