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Audit Program Grant Expenditure

This document outlines substantive audit procedures to test grant expenditures for a nonprofit organization. It includes steps to obtain an approved budget and compare actual expenses to the budget, examine a sample of expense documentation for authorization and compliance with tax laws, consider related party transactions, and ensure separate disclosure of required information. The final step is for the auditor to determine if the expenditure testing procedures adequately address risks and were performed and documented appropriately.

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Razii Kamali
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© © All Rights Reserved
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127 views

Audit Program Grant Expenditure

This document outlines substantive audit procedures to test grant expenditures for a nonprofit organization. It includes steps to obtain an approved budget and compare actual expenses to the budget, examine a sample of expense documentation for authorization and compliance with tax laws, consider related party transactions, and ensure separate disclosure of required information. The final step is for the auditor to determine if the expenditure testing procedures adequately address risks and were performed and documented appropriately.

Uploaded by

Razii Kamali
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Audit Program Substantive Procedures

WP Ref.:

Grant Expenditure

Prepared
by:
Date:
Reviewed
by:
Date:

Client:
Period:
Sr. #

Test

Lead Schedules

Obtain mapping of expenses and determine whether grouping of items under


an account head is appropriate.

Obtain approved project budget and financial reports submitted with the
donor and determine whether account classifications in the financial
statements conform to such reports and the budget.
Obtain actual vs budget comparison and perform the following procedures:

Identify the variances.

Identify the right people to ask for explanations.

Evaluate the response with professional skepticism.

Compare the explanations obtained to other information known, and


perform additional procedures when warranted.

Document the conclusion.

Select an appropriate sample of expenses (minimum expense coverage


should be 65%) and perform the following procedures:

Examine invoices and other supporting documentation.

Determine whether additional documentation exists to support the


transaction.

Determine whether transactions were properly authorized in accordance


with the companys policy.

Determine whether transactions are the ones the entity would be


expected to carry out i.e. necessary to meet project objectives.

Determine whether terms of the transaction seem reasonable.

Determine whether income tax required to be deducted/ collected under


the Income Tax Ordinance, 2001 has been deducted/ collected.

Determine whether payments are being made through crossed cheques


other than those allowed by the Income Tax Ordinance, 2001.

Determine whether transactions are posted in correct account codes.

Consider whether transactions may be occurring between the entity and


related parties that are not being given appropriate accounting treatment.

Consider whether balances or transactions that are large or unusual indicate


the existence of a previously undisclosed related party.

Determine that information requiring separate disclosure in the financial


statements is documented.

I am satisfied that the Grant Expenditure procedures respond to the identified


risks and were appropriately performed and documented.

WP Ref

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