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Audit Programme Long Term Loan

The document outlines an audit program for testing long-term and short-term loans and running finance for a company. It includes substantive analytical procedures to analyze movements in borrowing amounts, interest expenses, and rates. It also describes other procedures like agreeing opening balances, sampling new and repaid borrowings, performing bank reconciliations, and confirming balances and terms with lenders. The program aims to ensure borrowings are recorded correctly and comply with accounting standards and loan agreements.

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faheem
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© © All Rights Reserved
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114 views5 pages

Audit Programme Long Term Loan

The document outlines an audit program for testing long-term and short-term loans and running finance for a company. It includes substantive analytical procedures to analyze movements in borrowing amounts, interest expenses, and rates. It also describes other procedures like agreeing opening balances, sampling new and repaid borrowings, performing bank reconciliations, and confirming balances and terms with lenders. The program aims to ensure borrowings are recorded correctly and comply with accounting standards and loan agreements.

Uploaded by

faheem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLS, PDF, TXT or read online on Scribd
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Loan

RIZWAN & COMPANY Reviewed by Reviewed by Schedule


Chartered Accountants

CLIENT : Technimen Agha (Private) Limited Date Date


ACCOUNTING PERIOD : June 30, 2019 Time Spent Hrs. Man Days Work done
Estimated reference
AUDIT PROGRAMME OF : LONG/SHORT TERM LOAN AND Actual
RUNNING FINANCE

ASSERTION TEST TEST DESCRIPTION SAMPLE SCHEDULE STAFF


NO. SIZE SELECTION INITIALS GRADE
METHOD
C E A V

A SUBSTANTIVE ANALYTICAL PROCEDURES:

1 Explain movements and investigate any unexpected


or unusual relationships between current year, prior
year and budgeted amounts for

a) total borrowings
b) proceeds from new borrowings
c) current and long term borrowings balances

2 Review relationships between new borrowings pro-


ceeds and borrowings issue costs, discounts and
premium.

3 Explain movements and investigate any unexpected


or unusual relationships between current year, prior
year and budgeted amounts for

a) interest expense
b) interest capitalized
c) amortization of issue costs, premiums and
discounts
d) accrued interest payable
e) interest expense as a percentage of borrowings

4 Compute the average effective interest rate on


average outstanding borrowings in period and com-
pare with prior period or market rates.
Loan

RIZWAN & COMPANY Reviewed by Reviewed by Schedule


Chartered Accountants

CLIENT : Technimen Agha (Private) Limited Date Date


ACCOUNTING PERIOD : June 30, 2019 Time Spent Hrs. Man Days Work done
Estimated reference
AUDIT PROGRAMME OF : LONG/SHORT TERM LOAN AND Actual
RUNNING FINANCE

ASSERTION TEST TEST DESCRIPTION SAMPLE SCHEDULE STAFF


NO. SIZE SELECTION INITIALS GRADE
METHOD
C E A V

5 Review borrowings repayments subsequent to year-


end and investigate large or unusual items.

6 Test interest expense, adjusted for capitalized


interest , by multiplying average aggregate amount of
borrowings by an estimated average interest rate

7 Test capitalized interest by multiplying average


interest rate by average applicable asset amounts.

B OTHER SUBSTANTIVE PROCEDURES:

1. Agree opening balance with prior year file/


audited accounts.

2 Obtain borrowings listing and check reconci-


liation to general ledger and

a) check arithmetic accuracy


b) trace amounts to appropriate sources
c) Investigate large or unusual items.
d) agree items to borrowing agreements and
notes to the accounts.
e) check translation of foreign currency.
f) check resolution and authorities in articles
for borrowings.
Loan

RIZWAN & COMPANY Reviewed by Reviewed by Schedule


Chartered Accountants

CLIENT : Technimen Agha (Private) Limited Date Date


ACCOUNTING PERIOD : June 30, 2019 Time Spent Hrs. Man Days Work done
Estimated reference
AUDIT PROGRAMME OF : LONG/SHORT TERM LOAN AND Actual
RUNNING FINANCE

ASSERTION TEST TEST DESCRIPTION SAMPLE SCHEDULE STAFF


NO. SIZE SELECTION INITIALS GRADE
METHOD
C E A V

3 For a sample of new borrowings

a) agree listing details to borrowing document-


ation
b) agree to cash/bank receipts
c) agree calculation of premium or discount
d) Check issue costs to supporting documen-
tation.

4 For a sample of borrowings repayments

a) agree payment amount to agreements


b) agree date to agreements
c) agree to cash/bank payments
d) check computation of realized exchange
differences on repayments.

5 Perform bank reconciliation in case of running


finance facilities from banks.

6 Prepare summarized movement of loan account


and check with loan statement.

7 Prepare summarized movement of financial


charges payable and check:

a) computation of financial charges accrued


and paid during the year
b) agree rate and date of payment with agreem-
ent
c) accrual of penal interest/ late payment charges
Loan

RIZWAN & COMPANY Reviewed by Reviewed by Schedule


Chartered Accountants

CLIENT : Technimen Agha (Private) Limited Date Date


ACCOUNTING PERIOD : June 30, 2019 Time Spent Hrs. Man Days Work done
Estimated reference
AUDIT PROGRAMME OF : LONG/SHORT TERM LOAN AND Actual
RUNNING FINANCE

ASSERTION TEST TEST DESCRIPTION SAMPLE SCHEDULE STAFF


NO. SIZE SELECTION INITIALS GRADE
METHOD
C E A V
in case of overdue balances.
Loan

RIZWAN & COMPANY Reviewed by Reviewed by Schedule


Chartered Accountants

CLIENT : Technimen Agha (Private) Limited Date Date


ACCOUNTING PERIOD : June 30, 2019 Time Spent Hrs. Man Days Work done
Estimated reference
AUDIT PROGRAMME OF : LONG/SHORT TERM LOAN AND Actual
RUNNING FINANCE

ASSERTION TEST TEST DESCRIPTION SAMPLE SCHEDULE STAFF


NO. SIZE SELECTION INITIALS GRADE
METHOD
C E A V

8 Check capitalization of interest, if any with


bank authority letter in case of rescheduling/
restructuring.

9 Ensure capitalization of borrowing cost is as per


policy and as per requirement of the IAS.

10 Check mortgages and charges from agreement /


confirmation to register of mortgages and
charges.

11 Circularize lenders for confirmation of borrowing


outstanding in the period and at year-end as
well as relevant terms.

C PRESENTATION:

As per disclosure check list.

12. Check foreign currency loans are converted at


the rupee rates ruling at the balance sheet date.

13. Check computation of accrued financial charges


and ensure these are properly segregated from
principal.

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