The document is an illustrative independent auditor's report that includes four examples of circumstances that could result in modified opinions.
The first example describes a qualified opinion due to a material misstatement of inventories. The second example describes an adverse opinion due to failure to consolidate a subsidiary. The third example describes a qualified opinion because the auditor was unable to obtain evidence about an investment. The fourth example describes a disclaimer of opinion because the auditor was unable to obtain evidence about a major joint venture investment.
The document discusses the auditor's responsibility to consider fraud and error in an audit of financial statements. It defines fraud and error, noting that misstatements can arise intentionally from fraud or unintentionally from error. The primary responsibility for preventing and detecting fraud and error rests with management and those charged with governance of the entity. As part of an audit conducted in accordance with BSAs, the auditor is responsible for obtaining reasonable assurance about whether the financial statements are free from material misstatement due to fraud or error, though an audit cannot guarantee the detection of fraud. The auditor's responsibilities are limited by the inherent limitations of an audit.
The document provides an overview of audit reports, including:
- The objectives of an audit report are to form an opinion on the financial statements based on audit evidence and to express this opinion through a written report.
- The report must state the scope and limitations of the audit and separate facts from opinions.
- The nature of the audit examination, management responsibilities, and standards of auditing like SA 700 all impact the structure and wording of the audit report.
The document is an illustrative independent auditor's report that includes four examples of circumstances that could result in modified opinions.
The first example describes a qualified opinion due to a material misstatement of inventories. The second example describes an adverse opinion due to failure to consolidate a subsidiary. The third example describes a qualified opinion because the auditor was unable to obtain evidence about an investment. The fourth example describes a disclaimer of opinion because the auditor was unable to obtain evidence about a major joint venture investment.
The document discusses the auditor's responsibility to consider fraud and error in an audit of financial statements. It defines fraud and error, noting that misstatements can arise intentionally from fraud or unintentionally from error. The primary responsibility for preventing and detecting fraud and error rests with management and those charged with governance of the entity. As part of an audit conducted in accordance with BSAs, the auditor is responsible for obtaining reasonable assurance about whether the financial statements are free from material misstatement due to fraud or error, though an audit cannot guarantee the detection of fraud. The auditor's responsibilities are limited by the inherent limitations of an audit.
The document provides an overview of audit reports, including:
- The objectives of an audit report are to form an opinion on the financial statements based on audit evidence and to express this opinion through a written report.
- The report must state the scope and limitations of the audit and separate facts from opinions.
- The nature of the audit examination, management responsibilities, and standards of auditing like SA 700 all impact the structure and wording of the audit report.
The document discusses key aspects of IND AS 20 regarding accounting for government grants and disclosure of government assistance. It states that government grants shall not be recognized until there is reasonable assurance of compliance with attached conditions and receipt of the grant. Grants related to assets are recognized as deferred income and amortized to profit or loss over the useful life of the asset. Grants related to income are recognized in profit or loss in the periods in which the related expenses are incurred.
1. The document discusses auditing procedures for owners' equity accounts, including capital stock, paid-in capital, retained earnings, and dividends.
2. The auditor verifies that owners' equity transactions are properly authorized and accurately recorded in the accounts. For capital stock, this includes confirming share amounts with transfer agents and examining board meeting minutes.
3. The auditor also confirms that retained earnings are properly adjusted for net income/loss and dividends declared, and that presentation and disclosure requirements are met.
This document provides an audit plan for Beximco Synthetics Limited for the year 2013. It begins with an introduction and outlines the audit objective, terms of engagement, and deliverables. It then discusses understanding the entity's environment, including economic factors, client characteristics, financial performance, and reporting framework. Next, it describes management and auditor responsibilities. The document outlines the audit approach, including risk analysis, materiality, fraud considerations, and internal controls. It then provides an audit program covering internal controls, revenue/purchases, sampling, substantive procedures, and specific items. Finally, it discusses independence, the audit team, timetable, and costs. The overall purpose is to present the audit process and focus areas to assess
The document discusses audit reports and their components. It explains that an audit report is the formal opinion of audit findings and the end product of an audit. It describes the different types of audit opinions including unmodified/unqualified, qualified, adverse, and disclaimer of opinions. It also outlines the standardized format for audit reports, which typically includes sections for the title, addressee, introductory paragraph, management's responsibility, auditor's responsibility, opinion, basis for opinion, other reporting responsibilities, auditor's signature, place of signature, and date.
This document provides information about audit reports and certificates. It defines an audit report as a presentation of collected facts regarding a company's accounts that informs shareholders about whether the accounts accurately portray the company's financial condition. An audit certificate confirms the accuracy of specific information based on documentary evidence. The document outlines the key components of an audit report according to the Companies Act and discusses important auditing concepts like "true and fair view", types of reports, and the differences between reports and certificates.
The external auditor's report provides an opinion on a company's financial statements and whether they comply with GAAP and present a true and fair view. The auditor establishes if the balance sheet, profit/loss accounts agree with books and comply with accounting standards. The auditor's report is addressed to board members and includes the date, type of audit (clean or qualified), and name of the auditing firm. Large auditing firms that provide these reports globally include PricewaterhouseCoopers, Deloitte, Ernst & Young, and KPMG.
This document is the consolidated financial statements of Hyundai Card Co., Ltd. and its subsidiaries for the years ended December 31, 2018 and 2017. It includes the consolidated statements of financial position, consolidated statements of comprehensive income, consolidated statements of changes in equity, consolidated statements of cash flows, notes to the consolidated financial statements, and an independent auditor's report. The independent auditor's report indicates the consolidated financial statements were audited in accordance with Korean Standards on Auditing and present fairly the financial position and financial performance of Hyundai Card Co., Ltd. and its subsidiaries.
This document discusses SLAuS 210 which deals with an auditor's responsibilities in agreeing the terms of an audit engagement with management. It covers establishing preconditions for an audit, the objective to accept an audit only when terms are agreed, and confirming common understanding of the engagement terms. It also provides guidance on the contents of an audit engagement letter, factors to consider regarding the acceptability of the financial reporting framework, management's responsibilities for internal controls and financial statement preparation, and addressing changes to engagement terms.
This document summarizes International Standard on Auditing (UK) 210 (Revised June 2016) which deals with the auditor's responsibilities in agreeing the terms of an audit engagement. Key points include:
- The auditor must determine if the financial reporting framework to be applied is acceptable and obtain management's acknowledgement of its responsibilities for preparing the financial statements, internal controls, and providing access to information.
- The agreed terms of the audit engagement must be documented in writing, including the objectives and scope of the audit, responsibilities of the auditor and management, and expected form of any reports.
- For recurring audits the auditor assesses if the terms need revising. The auditor will not agree to changes in the
Isa240 the auditor’s responsibilities relating to fraud in an audit of financ...JUAN LUIS PINEDO SANDOVAL
This document is the International Standard on Auditing 240 which outlines the auditor's responsibilities relating to fraud in a financial statement audit. It discusses key characteristics of fraud, and that while management is primarily responsible for fraud prevention and detection, the auditor is responsible for obtaining reasonable assurance that financial statements are free from material misstatement due to fraud or error. The auditor aims to identify and assess fraud risks, obtain sufficient evidence regarding those risks, and appropriately respond to any suspected or identified frauds.
SRS 4410 Enagement to complete financial informationRahul Sharma
This document establishes standards for compilation engagements in India. The objective of a compilation engagement is for an accountant to use accounting expertise to collect, classify, and summarize financial information, without testing assertions. Management is responsible for the financial information and internal controls. The accountant plans procedures, documents work, obtains an understanding of the entity and basis of accounting, and considers whether the information appears appropriate. If aware of material misstatements, the accountant should withdraw. The report should be titled "Accountant's Report on Compilation of Unaudited Financial Statements."
This document summarizes the key points of an International Standard on Auditing (UK) regarding audit documentation:
1) It establishes requirements for audit documentation relating to the timing of preparation, documentation of procedures performed and evidence obtained, and assembly of the final audit file.
2) Audit documentation provides evidence of the audit work performed and conclusions reached, and promotes quality and consistency in the audit.
3) The auditor must document significant matters, judgments made, and any departures from audit standards. Audit documentation must be sufficient to allow an experienced auditor to understand the nature, timing and extent of procedures performed.
The audit report communicates the auditor's opinion on the financial statements and sets out requirements for its content and format. The standard audit report includes basic elements like the title, addressee, management and auditor responsibilities, scope of the audit, and opinion. There are two main types of reports - unqualified and qualified. An unqualified report means the financials fairly represent the entity. A qualified report is issued if problems cannot be resolved with management.
Vouching is an important auditing tool that involves examining entries in accounting books and records along with supporting documentation to verify transactions are accurate, authorized, and properly recorded. It ensures entries are valid by tracing them back to original evidence rather than just checking for arithmetic accuracy. Detecting fraud is not the primary objective of an audit but a byproduct, as the main goal is for the auditor to form an opinion on whether financial statements fairly represent the financial position of an organization.
The PSRE 2400 document:
1) Establishes the objective of a review engagement is to enable the auditor to state whether anything has come to their attention that causes them to believe the financial statements are not prepared in accordance with accounting principles (provide negative assurance).
2) Details the general principles, scope, level of assurance (moderate), terms of engagement including planning, work performed by others, documentation, procedures, conclusions and reporting for a review engagement.
3) Provides appendices including an example engagement letter, detailed review
The document discusses key aspects of IND AS 20 regarding accounting for government grants and disclosure of government assistance. It states that government grants shall not be recognized until there is reasonable assurance of compliance with attached conditions and receipt of the grant. Grants related to assets are recognized as deferred income and amortized to profit or loss over the useful life of the asset. Grants related to income are recognized in profit or loss in the periods in which the related expenses are incurred.
1. The document discusses auditing procedures for owners' equity accounts, including capital stock, paid-in capital, retained earnings, and dividends.
2. The auditor verifies that owners' equity transactions are properly authorized and accurately recorded in the accounts. For capital stock, this includes confirming share amounts with transfer agents and examining board meeting minutes.
3. The auditor also confirms that retained earnings are properly adjusted for net income/loss and dividends declared, and that presentation and disclosure requirements are met.
This document provides an audit plan for Beximco Synthetics Limited for the year 2013. It begins with an introduction and outlines the audit objective, terms of engagement, and deliverables. It then discusses understanding the entity's environment, including economic factors, client characteristics, financial performance, and reporting framework. Next, it describes management and auditor responsibilities. The document outlines the audit approach, including risk analysis, materiality, fraud considerations, and internal controls. It then provides an audit program covering internal controls, revenue/purchases, sampling, substantive procedures, and specific items. Finally, it discusses independence, the audit team, timetable, and costs. The overall purpose is to present the audit process and focus areas to assess
The document discusses audit reports and their components. It explains that an audit report is the formal opinion of audit findings and the end product of an audit. It describes the different types of audit opinions including unmodified/unqualified, qualified, adverse, and disclaimer of opinions. It also outlines the standardized format for audit reports, which typically includes sections for the title, addressee, introductory paragraph, management's responsibility, auditor's responsibility, opinion, basis for opinion, other reporting responsibilities, auditor's signature, place of signature, and date.
This document provides information about audit reports and certificates. It defines an audit report as a presentation of collected facts regarding a company's accounts that informs shareholders about whether the accounts accurately portray the company's financial condition. An audit certificate confirms the accuracy of specific information based on documentary evidence. The document outlines the key components of an audit report according to the Companies Act and discusses important auditing concepts like "true and fair view", types of reports, and the differences between reports and certificates.
The external auditor's report provides an opinion on a company's financial statements and whether they comply with GAAP and present a true and fair view. The auditor establishes if the balance sheet, profit/loss accounts agree with books and comply with accounting standards. The auditor's report is addressed to board members and includes the date, type of audit (clean or qualified), and name of the auditing firm. Large auditing firms that provide these reports globally include PricewaterhouseCoopers, Deloitte, Ernst & Young, and KPMG.
This document is the consolidated financial statements of Hyundai Card Co., Ltd. and its subsidiaries for the years ended December 31, 2018 and 2017. It includes the consolidated statements of financial position, consolidated statements of comprehensive income, consolidated statements of changes in equity, consolidated statements of cash flows, notes to the consolidated financial statements, and an independent auditor's report. The independent auditor's report indicates the consolidated financial statements were audited in accordance with Korean Standards on Auditing and present fairly the financial position and financial performance of Hyundai Card Co., Ltd. and its subsidiaries.
This document discusses SLAuS 210 which deals with an auditor's responsibilities in agreeing the terms of an audit engagement with management. It covers establishing preconditions for an audit, the objective to accept an audit only when terms are agreed, and confirming common understanding of the engagement terms. It also provides guidance on the contents of an audit engagement letter, factors to consider regarding the acceptability of the financial reporting framework, management's responsibilities for internal controls and financial statement preparation, and addressing changes to engagement terms.
This document summarizes International Standard on Auditing (UK) 210 (Revised June 2016) which deals with the auditor's responsibilities in agreeing the terms of an audit engagement. Key points include:
- The auditor must determine if the financial reporting framework to be applied is acceptable and obtain management's acknowledgement of its responsibilities for preparing the financial statements, internal controls, and providing access to information.
- The agreed terms of the audit engagement must be documented in writing, including the objectives and scope of the audit, responsibilities of the auditor and management, and expected form of any reports.
- For recurring audits the auditor assesses if the terms need revising. The auditor will not agree to changes in the
Isa240 the auditor’s responsibilities relating to fraud in an audit of financ...JUAN LUIS PINEDO SANDOVAL
This document is the International Standard on Auditing 240 which outlines the auditor's responsibilities relating to fraud in a financial statement audit. It discusses key characteristics of fraud, and that while management is primarily responsible for fraud prevention and detection, the auditor is responsible for obtaining reasonable assurance that financial statements are free from material misstatement due to fraud or error. The auditor aims to identify and assess fraud risks, obtain sufficient evidence regarding those risks, and appropriately respond to any suspected or identified frauds.
SRS 4410 Enagement to complete financial informationRahul Sharma
This document establishes standards for compilation engagements in India. The objective of a compilation engagement is for an accountant to use accounting expertise to collect, classify, and summarize financial information, without testing assertions. Management is responsible for the financial information and internal controls. The accountant plans procedures, documents work, obtains an understanding of the entity and basis of accounting, and considers whether the information appears appropriate. If aware of material misstatements, the accountant should withdraw. The report should be titled "Accountant's Report on Compilation of Unaudited Financial Statements."
This document summarizes the key points of an International Standard on Auditing (UK) regarding audit documentation:
1) It establishes requirements for audit documentation relating to the timing of preparation, documentation of procedures performed and evidence obtained, and assembly of the final audit file.
2) Audit documentation provides evidence of the audit work performed and conclusions reached, and promotes quality and consistency in the audit.
3) The auditor must document significant matters, judgments made, and any departures from audit standards. Audit documentation must be sufficient to allow an experienced auditor to understand the nature, timing and extent of procedures performed.
The audit report communicates the auditor's opinion on the financial statements and sets out requirements for its content and format. The standard audit report includes basic elements like the title, addressee, management and auditor responsibilities, scope of the audit, and opinion. There are two main types of reports - unqualified and qualified. An unqualified report means the financials fairly represent the entity. A qualified report is issued if problems cannot be resolved with management.
Vouching is an important auditing tool that involves examining entries in accounting books and records along with supporting documentation to verify transactions are accurate, authorized, and properly recorded. It ensures entries are valid by tracing them back to original evidence rather than just checking for arithmetic accuracy. Detecting fraud is not the primary objective of an audit but a byproduct, as the main goal is for the auditor to form an opinion on whether financial statements fairly represent the financial position of an organization.
The PSRE 2400 document:
1) Establishes the objective of a review engagement is to enable the auditor to state whether anything has come to their attention that causes them to believe the financial statements are not prepared in accordance with accounting principles (provide negative assurance).
2) Details the general principles, scope, level of assurance (moderate), terms of engagement including planning, work performed by others, documentation, procedures, conclusions and reporting for a review engagement.
3) Provides appendices including an example engagement letter, detailed review
This document discusses several topics related to auditing:
1) Matters that could indicate non-compliance with laws and regulations by management, such as unusual payments, transactions with tax havens, and improperly recorded transactions.
2) The importance of disclosing accounting policies used and any changes to those policies.
3) That guidance notes are recommendatory for auditors but some are considered mandatory.
4) That inquiry, seeking information from knowledgeable individuals, is an important audit procedure used to obtain evidence.
GAAP Accounting Update: A Review of Recent Changes in GAAP - Derek DanielDecosimoCPAs
This document summarizes recent changes and proposed changes to GAAP standards. It discusses amendments to accounting for unrecognized tax benefits, the definition of a public business entity, accounting alternatives for private companies regarding goodwill impairment testing and amortization, and a simplified hedge accounting approach for certain interest rate swaps entered into by private companies. The overall intent is to reduce costs for private companies by simplifying some accounting and financial reporting requirements.
The document discusses various statutory reporting requirements for auditors under Indian law, including the Companies Act, Insurance Regulations, Banking Regulations, and others. It covers sections of the Companies Act that specify information auditors must report on, such as loans and advances, transactions, directors, and cess payments. It also discusses compliance with accounting standards, providing adverse comments, disclaimers of opinion, and modified opinions that may be necessary in an auditor's report.
EY's latest newsletter summarizes SEC developments in the last quarter. This issue highlights the remarks made by SEC staff members at the recent AICPA National Conference on Current SEC and PCAOB Developments related to SEC reporting implications of new accounting standards, non-GAAP financial measures and management’s discussions and analysis disclosure considerations for income taxes. We also discuss the SEC's progress on rulemaking and other initiatives, as well as significant personnel changes.
- The document outlines International Standard on Assurance Engagements 3400 which establishes standards and guidance for engagements to examine and report on prospective financial information.
- It discusses key aspects of such engagements including the auditor's assurance responsibilities, acceptance of the engagement, examination procedures, presentation and disclosure requirements, and the content of reports on examinations of prospective financial information.
- The standard is intended to apply to examinations of best-estimate and hypothetical assumptions in prospective financial information but does not apply to general or narrative prospective financial information.
This standard deals with the auditor's responsibilities regarding going concern in a financial statement audit. It outlines key concepts like indicators of going concern issues, management's responsibilities in assessing going concern, and the auditor's responsibilities in evaluating management's assessment. The auditor must consider whether events or conditions cast doubt on going concern and obtain sufficient evidence to conclude on the appropriateness of using the going concern assumption. The standard also provides guidance on implications for the auditor's report depending on whether use of the going concern basis is appropriate, questionable, or inappropriate.
This document discusses the Companies Auditor's Report Order, 2016 and provides guidance on its applicability and the matters to be reported by auditors. It specifies that the order is applicable to all companies except for banking, insurance, Section 8, OPCs, small and select private companies. It outlines the regulatory framework and illustrates examples of companies that would be subject to the order. It provides the general approach auditors should take and notes the matters that must be included in the audit report such as fixed assets, inventory, loans, deposits, cost records, statutory dues and others.
Rodel S. Navarro; Business and Management Consultant and Director; RODEL SY NAVARRO BUSINESS CONSULTANCY SERVICES (RSNBCS); Tel / Mobile: +63-0917-7333563; Email: rsnbcs@gmail.com http://www.slideshare.net/RSNBCS; (About Business Laws compilation): http://www.slideshare.net/BUSINESSLAWSPH Email: businesslawsph@gmail.com; https://www.slideshare.net/FREEPDFBOOKSPH; freepdfbooksph@gmail.com; www.slideshare.net/IFRS_IAS_COMPILED; ifrs.ias.compiled@gmail.com; https://www.slideshare.net/PH_STANDARDSONAUDITING_COMPILED; psauditing.compiled@gmail.com
Financial statements of a Company are the introductory and formal periodic reports through which the commercial operation communicates fiscal information to its possessors and colourful other external parties which include investors, duty authorities, government, workers, etc. These typically relate to (a) the balance distance ( position statement) at the end of the counting period, and (b) the statement of profit and loss of a. company. Nowadays, the cash inflow statement is also taken as an integral element of the financial statements of a company.
Groom law group RiXtrema optimizer report final 12-20-19Daniel Satchkov
- The memorandum discusses the use of RiXtrema's Reg. BI Optimizer Report by financial advisors in making rollover recommendations subject to fiduciary duties under ERISA or Regulation Best Interest.
- The Report appears to contain information establishing elements courts have found important for prudent decisions, and the SEC suggests are important for best interest recommendations, regarding rollover decisions.
- Using and completing the Report could help create a documented record supporting a best interest recommendation to roll over from one account to another, though courts may also consider substantive prudence and fiduciary standards.
The document discusses accounting standards and provides details about their objectives, issuance, and application. The key points are:
- Accounting standards aim to standardize accounting policies and financial statement presentation to facilitate comparison across firms.
- The Institute of Chartered Accountants of India issues accounting standards that must be followed in preparing financial statements under the Companies Act.
- Over 30 accounting standards have been issued so far covering various aspects of recognition, measurement, treatment and disclosure of transactions and events.
- Compliance with accounting standards brings uniformity and enhances the quality and transparency of financial reporting.
This document outlines Philippine Standard on Auditing 520 (Redrafted) regarding analytical procedures. It defines analytical procedures as evaluations of financial information through analysis of plausible relationships among financial and non-financial data. It requires the auditor to determine the suitability of analytical procedures for given assertions, evaluate the reliability of data used, develop an expectation of recorded amounts with sufficient precision, and determine an acceptable difference without further investigation. It also requires the auditor to design analytical procedures near the end of the audit to assist in forming an overall conclusion on the financial statements.
The document is Philippine Standard on Auditing 300 (Redrafted) which provides guidance on planning an audit of financial statements. It discusses key requirements for planning activities including:
1) Involving key engagement team members in planning discussions.
2) Performing preliminary engagement activities such as evaluating compliance with ethical requirements and understanding terms of the engagement.
3) Establishing an overall audit strategy and detailed audit plan that address scope, timing of procedures, and resource needs.
4) Updating the strategy and plan as needed during the audit.
It emphasizes the importance of planning to the effectiveness and efficiency of the audit. Planning activities are tailored based on entity size and complexity.
Small Business Management An Entrepreneur’s Guidebook 8th edition by Byrd tes...ssuserf63bd7
Small Business Management An Entrepreneur’s Guidebook 8th edition by Byrd test bank.docx
https://qidiantiku.com/test-bank-for-small-business-management-an-entrepreneurs-guidebook-8th-edition-by-mary-jane-byrd.shtml
A comprehensive-study-of-biparjoy-cyclone-disaster-management-in-gujarat-a-ca...Samirsinh Parmar
Disaster management;
Cyclone Disaster Management;;
Biparjoy Cyclone Case Study;
Meteorological Observations;
Best practices in Disaster Management;
Synchronization of Agencies;
GSDMA in Cyclone disaster Management;
History of Cyclone in Arabian ocean;
Intensity of Cyclone in Gujarat;
Cyclone preparedness;
Miscellaneous observations - Biparjoy cyclone;
Role of social Media in Disaster Management;
Unique features of Biparjoy cyclone;
Role of IMD in Biparjoy Prediction;
Lessons Learned; Disaster Preparedness; published paper;
Case study; for disaster management agencies; for guideline to manage cyclone disaster; cyclone management; cyclone risks; rescue and rehabilitation for cyclone; timely evacuation during cyclone; port closure; tourism closure etc.
From Concept to reality : Implementing Lean Managements DMAIC Methodology for...Rokibul Hasan
The Ready-Made Garments (RMG) industry in Bangladesh is a cornerstone of the economy, but increasing costs and stagnant productivity pose significant challenges to profitability. This study explores the implementation of Lean Management in the Sampling Section of RMG factories to enhance productivity. Drawing from a comprehensive literature review, theoretical framework, and action research methodology, the study identifies key areas for improvement and proposes solutions.
Through the DMAIC approach (Define, Measure, Analyze, Improve, Control), the research identifies low productivity as the primary problem in the Sampling Section, with a PPH (Productivity per head) of only 4.0. Using Lean Management techniques such as 5S, Standardized work, PDCA/Kaizen, KANBAN, and Quick Changeover, the study addresses issues such as pre and post Quick Changeover (QCO) time, improper line balancing, and sudden plan changes.
The research employs regression analysis to test hypotheses, revealing a significant correlation between reducing QCO time and increasing productivity. With a regression equation of Y = -0.000501X + 6.72 and an R-squared value of 0.98, the study demonstrates a strong relationship between the independent variables (QCO downtime and improper line balancing downtime) and the dependent variable (productivity per head).
The findings suggest that by implementing Lean Management practices and addressing key productivity inhibitors, RMG factories can achieve substantial improvements in efficiency and profitability. The study provides valuable insights for practitioners, policymakers, and researchers seeking to enhance productivity in the RMG industry and similar manufacturing sectors.
This presentation, "The Morale Killers: 9 Ways Managers Unintentionally Demotivate Employees (and How to Fix It)," is a deep dive into the critical factors that can negatively impact employee morale and engagement. Based on extensive research and real-world experiences, this presentation reveals the nine most common mistakes managers make, often without even realizing it.
The presentation begins by highlighting the alarming statistic that 70% of employees report feeling disengaged at work, underscoring the urgency of addressing this issue. It then delves into each of the nine "morale killers," providing clear explanations and illustrative examples.
1. Ignoring Achievements: The presentation emphasizes the importance of recognizing and rewarding employees' efforts, tailored to their individual preferences.
2. Bad Hiring/Promotions & Broken Promises: It reveals the detrimental effects of poor hiring and promotion decisions, along with the erosion of trust that results from broken promises.
3. Treating Everyone Equally & Tolerating Poor Performance: This section stresses the need for fair treatment while acknowledging that employees have different needs. It also emphasizes the importance of addressing poor performance promptly.
4. Stifling Growth & Lack of Interest: The presentation highlights the importance of providing opportunities for learning and growth, as well as showing genuine care for employees' well-being.
5. Unclear Communication & Micromanaging: It exposes the frustration and resentment caused by vague expectations and excessive control, advocating for clear communication and employee empowerment.
The presentation then shifts its focus to the power of recognition and empowerment, highlighting how a culture of appreciation can fuel engagement and motivation. It provides actionable takeaways for managers, emphasizing the need to stop demotivating behaviors and start actively fostering a positive workplace culture.
The presentation concludes with a strong call to action, encouraging viewers to explore the accompanying blog post, "9 Proven Ways to Crush Employee Morale (and How to Avoid Them)," for a more in-depth analysis and practical solutions.
m249-saw PMI To familiarize the soldier with the M249 Squad Automatic Weapon ...LinghuaKong2
M249 Saw marksman PMIThe Squad Automatic Weapon (SAW), or 5.56mm M249 is an individually portable, gas operated, magazine or disintegrating metallic link-belt fed, light machine gun with fixed headspace and quick change barrel feature. The M249 engages point targets out to 800 meters, firing the improved NATO standard 5.56mm cartridge.The SAW forms the basis of firepower for the fire team. The gunner has the option of using 30-round M16 magazines or linked ammunition from pre-loaded 200-round plastic magazines. The gunner's basic load is 600 rounds of linked ammunition.The SAW was developed through an initially Army-led research and development effort and eventually a Joint NDO program in the late 1970s/early 1980s to restore sustained and accurate automatic weapons fire to the fire team and squad. When actually fielded in the mid-1980s, the SAW was issued as a one-for-one replacement for the designated "automatic rifle" (M16A1) in the Fire Team. In this regard, the SAW filled the void created by the retirement of the Browning Automatic Rifle (BAR) during the 1950s because interim automatic weapons (e.g. M-14E2/M16A1) had failed as viable "base of fire" weapons.
Early in the SAW's fielding, the Army identified the need for a Product Improvement Program (PIP) to enhance the weapon. This effort resulted in a "PIP kit" which modifies the barrel, handguard, stock, pistol grip, buffer, and sights.
The M249 machine gun is an ideal complementary weapon system for the infantry squad platoon. It is light enough to be carried and operated by one man, and can be fired from the hip in an assault, even when loaded with a 200-round ammunition box. The barrel change facility ensures that it can continue to fire for long periods. The US Army has conducted strenuous trials on the M249 MG, showing that this weapon has a reliability factor that is well above that of most other small arms weapon systems. Today, the US Army and Marine Corps utilize the license-produced M249 SAW.
Many companies have perceived CRM that accompanied by numerous
uncoordinated initiatives as a technological solution for problems in
individual areas. However, CRM should be considered as a strategy when
a company decides to implement it due to its humanitarian, technological
and process-related effects (Mendoza et al., 2007, p. 913). CRM is
evolving today as it should be seen as a strategy for maintaining a longterm relationship with customers.
A CRM business strategy includes the internet with the marketing,
sales, operations, customer services, human resources, R&D, finance, and
information technology departments to achieve the company’s purpose and
maximize the profitability of customer interactions (Chen and Popovich,
2003, p. 673).
After Corona Virus Disease-2019/Covid-19 (Coronavirus) first
appeared in Wuhan, China towards the end of 2019, its effects began to
be felt clearly all over the world. If the Coronavirus crisis is not managed
properly in business-to-business (B2B) and business-to-consumer
(B2C) sectors, it can have serious negative consequences. In this crisis,
companies can typically face significant losses in their sales performance,
existing customers and customer satisfaction, interruptions in operations
and accordingly bankruptcy
Maximize Your Efficiency with This Comprehensive Project Management Platform ...SOFTTECHHUB
In today's work environment, staying organized and productive can be a daunting challenge. With multiple tasks, projects, and tools to juggle, it's easy to feel overwhelmed and lose focus. Fortunately, liftOS offers a comprehensive solution to streamline your workflow and boost your productivity. This innovative platform brings together all your essential tools, files, and tasks into a single, centralized workspace, allowing you to work smarter and more efficiently.
Neal Elbaum Shares Top 5 Trends Shaping the Logistics Industry in 2024Neal Elbaum
In the ever-evolving world of logistics, staying ahead of the curve is crucial. Industry expert Neal Elbaum highlights the top five trends shaping the logistics industry in 2024, offering valuable insights into the future of supply chain management.
Neal Elbaum Shares Top 5 Trends Shaping the Logistics Industry in 2024
Paps 1003 ph
1. Philippine Auditing Practice Statement 1003Ph
GUIDANCE IN DEALING WITH REPORTS
REQUIRED BY THE SEC RELATING TO
INCREASE IN AUTHORIZED CAPITAL STOCK
OF A CORPORATION
Auditing and Assurance Standards Council
2. PAPS 1003Ph
2
PHILIPPINE AUDITING PRACTICE STATEMENT 1003Ph
GUIDANCE IN DEALING WITH REPORTS REQUIRED
BY THE SEC RELATING TO INCREASE IN AUTHORIZED
CAPITAL STOCK OF A CORPORATION
CONTENTS
Paragraph
Introduction………………………………………………………………… 1-2
Objective…………………………………………………………………… 3
Types of Engagements that May be Performed…………………………….. 4-14
Acceptance of an Engagement Relating to Increase in
Authorized Capital Stock……………………………………………….. 15-16
Defining the Terms of an Engagement to Perform Agreed-Upon
Procedures………………………………………………………………. 17-20
Reporting on Agreed-Upon Procedures Engagements……………………… 21-23
Wording of the Auditor’s Representation Letter to Accompany
the Agreed-Upon Procedures Report……………………………………. 24-25
Effective Date……………………………………………………………….. 26
Appendix 1: Required SEC Procedures Relating to an Application for
Increase in Authorized Capital Stock as Contained in
SEC Memorandum Circular No. 6, Series of 2008
Appendix 2: Example Auditor’s Reports on Agreed-Upon
Procedures Engagements
Appendix 3: Illustrative Auditor’s Representation Letters
3. PAPS 1003Ph
3
Philippine Auditing Practice Statements (PAPS or Statements) are issued by the Auditing
Standards and Assurance Council (AASC) to provide practical assistance to auditors in
implementing the Philippine Standards on Auditing (PSAs) or to promote good practice.
Statements do not have the authority of PSAs.
This Statement does not establish any new basic principles or essential procedures; its
purpose is to assist auditors, and to develop good practice, by providing guidance on the
application of the PSAs when conducting an audit of financial statements. The auditor
exercises professional judgment to determine the extent to which any of the audit
procedures described in this Statement may be appropriate in the light of the
requirements of the PSAs and the entity’s particular circumstances.
This PAPS of the AASC is not based on a specific International Auditing Practice
Statements (IAPS) issued by the International Auditing and Assurance Standards Board
of the International Federation of Accountants but was issued to address a specific
situation in the Philippines.
4. PAPS 1003Ph
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Introduction
1. The Securities and Exchange Commission (SEC) laid down certain basic reporting
requirements for request for approval of application by a corporation for increase
in its authorized capital stock involving cash payments for stock subscriptions and
conversion of advances or liabilities to equity. In these cases, the submission of
audited financial statements of the entity as of the last fiscal year is a basic
requirement.
2. Oftentimes, the SEC requires a report1
from an auditor in connection with a
corporation’s application for increase in its authorized capital stock. The type of
this report will depend upon:
• the kind of payments made for the subscriptions, which may be in the form
of cash, conversion of advances/ liabilities to equity, or both;
• the timing of the approval of the proposed increase in authorized capital
stock; or
• whether or not the applicable information shown in the latest audited
financial statements of the entity is considered by the SEC to be still
sufficient.
Objective
3. The purpose of this PAPS is to provide guidance to auditors in accepting and
performing engagements in connection with a corporation’s application for an
increase in its authorized capital stock.
Types of Engagements that May be Performed
4. Based on past experience by auditors in dealing with the relevant SEC
requirements, the engagement that the auditor may undertake in this connection
may fall into one of the three types of engagements listed below, depending upon
the particular circumstances.
a. an engagement to perform agreed-upon procedures regarding financial
information;
b. an engagement to report on supplementary information in connection with
an audit of financial statements; or
1
Additional reports may also be required by the SEC particularly if such reports have not been previously
submitted to the SEC in connection with the regular filing of reports by listed entities, such as SEC
Form 12-1 (Amended Registration Statement – List of Disclosure Requirements on Registration
Statements Prospectus). While the required information may not be directly related to the increase in
capital stock, the SEC may require such information as part of the exercise of its regulatory authority.
This PAPS does not cover such additional information.
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c. an engagement to report on a specific element, account or item of a financial
statement.
Engagements to perform agreed-upon procedures regarding financial information
5. In most cases, engagements relating to applications for increase in authorized
capital stock fall into an agreed-upon procedures type of engagement2
, particularly
if:
• the application for increase in authorized capital stock is filed long after
(e.g., more than 120 days3
) the date of the most recent audited financial
statements submitted to the SEC; and
• even if the application is close (e.g., 120 days or less) to the date of the most
recent audited financial statements submitted, the corresponding information
in such financial statements is considered by the SEC to be insufficient.
6. The standard that applies to this type of engagement is PSRS 4400 (originally
PSA 920), “Engagement to Perform Agreed-Upon Procedures Regarding
Financial Information.” An engagement to perform agreed-upon procedures
regarding financial information is not an assurance engagement as contemplated
under PSAE 3000 (Revised), “Assurance Engagements Other than Audits or
Reviews of Historical Financial Information.”
7. This PAPS covers mainly matters relating to the acceptance and performance of
agreed-upon procedures engagement relating to a corporation’s application for
increase in its authorized capital stock.
Engagements to report on supplementary information relating to audited financial
statements
8. If the application for increase in authorized capital stock is made on a date close
(e.g., 120 days or less) to the date of the most recent audited financial statements
submitted to the SEC and the applicable information in the audited financial
statements is considered sufficient by the SEC, the auditor may issue a report on
supplementary information.
9. If a report is issued on supplementary information relating to submitted audited
financial statements, the supplementary information, by implication, has been
covered by the applicable auditing procedures performed in the audit of the
financial statements as a whole.
2
These procedures are stated in SEC Memorandum Circular No. 6, Series of 2008, entitled “Guidelines on
On-Site Verification of Financial Records Relative to Certain Applications Filed with the Commission”.
See Appendix 1 for a list of the required SEC procedures.
3
This is the threshold presently adopted by the SEC.
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10. The report on the supplementary information presented in connection with audited
financial statements shall comply with the reporting requirements of PSA 700
(Redrafted), “Forming an Opinion and Reporting on Financial Statements.”
Engagements to report on a specific element, account or item of a financial
statement
11. In some cases, the requirements of the SEC may be covered by a report on an
audit of specific elements, accounts or items of financial statements. One such
example is the reporting on a schedule of advances or liabilities to be used as
payment for subscriptions or converted to equity in connection with the proposed
increase in authorized capital stock.
12. An engagement to report on a specific element, account or item of a financial
statement is an assurance engagement and may be undertaken in conjunction with
an engagement to audit the entity’s financial statements. In this case, a separate
opinion for each of these two engagements is expressed. These two engagements,
of course, will entail more cost and the client shall be fully informed about such
cost.
13. The applicable auditing standard when reporting on an audit of specific elements,
accounts or items of financial statements is PSA 805 (Revised and Redrafted),
“Special Considerations - Audits of Single Financial Statements and Specific
Elements, Accounts or Items of a Financial Statement.” Because the issuance of
an opinion is intended, the report for this type of engagement is written in the
context of an audit. Thus, the auditor is required to comply with the relevant
ethical requirements relating to an audit engagement and all PSAs relevant to the
audit, even if only one element is the subject of the audit.
14. As provided under PSA 805 (Revised and Redrafted), when an auditor is not
engaged to audit the entity’s financial statements, compliance with the relevant
requirements to report on a specific element, account or item of a financial
statement may not be practicable. In such cases, the auditor does not often have
the same understanding of the entity and its environment, including its internal
control, as in the case of an auditor who also audits the entity’s financial
statements. The auditor also may not have adequate knowledge about the general
quality of the accounting records or other accounting information which
knowledge is required in the audit of the entity’s financial statements. In some
cases, the PSAs require audit work that may be disproportionate to the element
being audited. PSA 805 (Revised and Redrafted) also provides that when the
auditor is not also engaged to audit the entity’s financial statements, the auditor
shall determine whether an audit of the element in accordance with PSAs is
practicable.
Acceptance of an Engagement Relating to Increase in Authorized
Capital Stock
15. Before accepting the engagement, the auditor shall discuss first with the client the
type of engagement that will be performed. In determining the type of
engagement to be performed, the auditor shall make reference to paragraphs 4
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to 14 of this PAPS and to the applicable standards as identified in paragraphs 6, 10
and 13 of this PAPS. In addition, if the engagement is an agreed-upon procedures
engagement, the auditor shall make reference to paragraphs 19 and 20 of this
PAPS with respect to specific required SEC procedures that may not be performed
or may have to be modified.
16. As required by PSA 210, “Terms of Engagement,” the auditor shall prepare an
appropriate engagement letter setting forth the scope and other terms of the
engagement, and if the engagement is an agreed-upon procedures engagement,
highlighting the required SEC procedures that may not be performed or may have
to be modified as discussed in paragraphs 19 and 20 of this PAPS. The auditor
shall request the client to discuss with the SEC the scope of work and the type of
report that the auditor expects to issue and obtain their acceptance by the SEC,
especially if the engagement is an agreed-upon procedures engagement and there
are omissions or modifications of certain required SEC procedures.
Defining the Terms of an Engagement to Perform Agreed-Upon
Procedures
17. Matters to be agreed upon with the client in an agreed-upon procedures
engagement, and which shall be specified clearly in the engagement letter, are:
a. Nature of the engagement including the fact that the procedures performed
will not constitute an audit or a review and that accordingly no assurance
will be expressed.
b. Stated purpose of the engagement.
c. Identification of the financial information to which the agreed-upon
procedures will be applied.
d. Nature, timing and extent of the specific procedures to be applied.
e. If applicable, any specific required SEC procedures that the auditor will be
unable to perform or has to be modified, and the reason for their omission or
modification.
f. Anticipated form of the report of factual findings.
g. Limitations on distribution of the report of factual findings.
18. An agreed-upon procedures engagement is not an assertion engagement.
Accordingly, the auditor shall exercise care in describing the procedures to be
performed.
• Describing procedures in terms that result in factual findings, such as
“compare,” “trace,” “compute,” inquire from,” “obtain” and other similar
terms, shall be used.
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• Describing procedures that result in some form of assurance or judgment,
such as “verify,” shall be avoided since these are inconsistent with the report
that will be issued by the auditor under PSRS 4400.
19. The auditor may be unable to perform certain required SEC procedures because
these are not practicable to do. These include;
• For an engagement involving cash payment for stock subscriptions, cash
count of the company’s funds. This procedure may no longer be practicable
to do if the cash paid for the stock subscription had already been deposited.
In any case, the SEC also specifies that the auditor trace the amounts
received to the bank-validated deposit slips and to the bank statements.
• For an engagement involving application of advances/liabilities as payment
for stock subscriptions,4
or their conversion to equity, “verification” of the
utilization of the proceeds of the cash previously received. This procedure
may no longer be practicable to do when the advances had been made in
prior years and the supporting documents are no longer available.
Moreover, the identification of the subsequent utilization of the cash
previously received as advances/liabilities may no longer be possible as such
cash received, in most cases, might have been commingled by an entity with
funds it received from other sources.
20. In some cases, the auditor may have to modify the required SEC procedures to be
able to perform the procedures under practicable terms. For example, in an
engagement involving cash payment for stock subscriptions, the SEC specifies
that the auditor inspect all entries in the cash disbursements book before and after
the date when the cash payment was received from the subscriber to identify any
payment that the entity being audited might have made to the subscriber during
these periods.5
However, the SEC does not specify any definite period for this
inspection; as a practical matter, in this case, the auditor may limit the period to
three months before the date the cash payment was received, and three months
thereafter or the date of the auditor’s report, whichever comes earlier.
If such a modification is made to any required SEC procedures, it is preferable for
the client to obtain the acceptance by the SEC of the periods that have been
specified.
Reporting on Agreed-Upon Procedures Engagements
21. The report for an agreed-upon procedures engagement, as required under…. PSRS
4400 is a “factual findings” report. In a “factual findings” report, no assurance is
4
This guidance also applies to deposits for subscriptions, which are usually presented in the equity section
in the balance sheet, received in periods prior to the filing with the SEC of the application for increase in
capital stock. Such transactions are considered by the SEC as conversion of advances to equity.
5
This requirement applies only to cash payment for subscription made simultaneous with or on or about
the same time the increase in capital is approved by the Board of Directors of the issuer and application
for increase in capital is filed with the SEC.
9. PAPS 1003Ph
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expressed and the users of the report assess for themselves the findings resulting
from the procedures performed by the auditor and they draw their own
conclusions from the reported findings.
22. When some required SEC procedures were not performed or were modified as
discussed in paragraphs 19 and 20, the auditor’s report shall contain the following:
• the required SEC procedures that were not performed or were modified; and
• the reasons for their omission and modification.
23. The following illustrative reports on agreed-upon procedures engagements are
shown in Appendix 2:
Example A Illustrative report on an agreed-upon procedures engagement in
connection with an entity’s application for an increase in its
authorized capital stock, with no omission or modification of any
required SEC procedures
Example B Illustrative report on agreed-upon procedures engagement in
connection with an entity’s application for an increase in its
authorized capital stock involving cash payment for subscriptions,
with omission and modification of some required SEC procedures
Example C Illustrative report on agreed-upon procedures engagement in
connection with an entity’s application for an increase in its
authorized capital involving application of previously-recorded
advances as payment for subscriptions or conversion of previously-
recorded advances to equity, with omission of required SEC
procedure
Wording of the Auditor’s Representation Letter to the SEC
Accompanying the Agreed-Upon Procedures Report
24. In addition to the auditor’s report referred to in paragraphs 21 to 23, the SEC also
requires the auditor to submit a specifically-worded representation letter to
accompany the auditor’s report. This auditor’s representation letter shall contain a
reference to any omission or modification of any required SEC procedures
included in the auditor’s report.
25. The following illustrative auditor’s representation letters are shown in
Appendix 3:
Illustration A Illustrative representation letter to the SEC of an independent
certified public accountant in connection with an entity’s
application for an increase in its authorized capital stock, with no
omission and modification of any required SEC procedures
10. PAPS 1003Ph
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Illustration B Illustrative representation letter to the SEC of an independent
certified public accountant in connection with an entity’s
application for an increase in its authorized capital stock involving
cash payment for subscriptions, with omission and modification of
some required SEC procedures
Illustration C Illustrative representation letter to the SEC of an independent
certified public accountant in connection with an entity’s
application for an increase in its authorized capital stock involving
application of previously recorded advances as payment for
subscription or their conversion to equity, with omission of a
required SEC procedure
Effective Date
26. This PAPS shall be effective for periods ending on or after December 15, 2009.
Earlier application is allowed.
11. PAPS 1003Ph
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Appendix 1
Required SEC Procedures Relating to an Application for Increase in
Authorized Capital Stock as Contained in SEC Memorandum
Circular No. 6, Series of 2008
The following are the procedures enumerated in SEC Memorandum Circular No. 6,
Series of 2008, pertaining to applications for increase in capital stock:
2.1.(a) Cash payment for subscriptions
i. Obtain from the company a schedule of cash received as deposits for
subscription on the proposed increase in capital, which shows the following
information:
- Date recorded in the books
- Official receipt number
- Name of subscriber
- Amount of cash received
- Form of payment (cash or check)
Attach a copy of the official receipts to the schedule.
ii. Check mathematical accuracy of the company’s schedule.
iii. Compare the balance of the deposits for subscription to the general ledger.
iv. Trace the cash received as deposits for subscription to the cash receipts
book.
v. Obtain a copy of the minutes of the meetings of the Board of Directors and
Stockholders approving the increase in authorized capital stock of the
company.
vi. Compare the amounts received from the subscribers to the duplicate copy of
the official receipts.
vii. Trace the amounts received to the bank-validated deposit slips and, for
check payments, trace amounts to bank statement. (Note: Attach a copy of
the deposit slip, passbook, and/or bank statement to the client’s schedule.)
viii. Inspect all entries in the cash disbursement books of the company for any
prior disbursements made by the company to the subscribers that could be
linked or associated with the subscriber’s payment for subscriptions.
12. PAPS 1003Ph
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Appendix 1
ix. Inspect all entries in the cash disbursements book of the company for any
subsequent disbursement, advances or loans granted to the subscriber.
x. Conduct a cash count of the funds of the company as of the date of
examination and work back up to the month immediately preceding the date
of the meeting when the stockholders approved the increase of capital of the
company.
xi. Obtain a summary of the cash in bank account of the company and the bank
reconciliation statements as of the end of the month immediately preceding
the submission of the application.
xii. Check the mathematical accuracy of the summary and bank reconciliation
statements; trace receipts and disbursements and other transactions in the
summary and bank reconciliation statements to entries in the general ledger;
and compare the balances shown in the summary and bank reconciliation
statements with the balances per books and bank statements.
2.1(b). Conversion of advances/liabilities as payment on subscription for proposed
increase in capital stock
i. Obtain a schedule of advances/ liabilities (or other account title used by the
company) as payment on the subscription for the proposed increase in
capital, that shows the following information:
- Date recorded in the books
- Name of creditor/subscriber
- Amount of advance/liability
- Nature of advance/liabilities (e.g., cash, equipment, other asset)
- Balance as of (date)
ii. Check mathematical accuracy of the company’s schedule.
iii. Compare the balance of the advances/ liabilities in the schedule to the
general ledger.
iv. Trace the advances/liabilities to the cash receipts book (if received in cash)
or to the journal book (if received as a non-cash asset).
v. Obtain a copy of the minutes of the meetings of the board of directors and
stockholders approving the increase in capital stock of the company and the
conversion of the advances/ liabilities to equity.
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Appendix 1
vi. Compare the amount approved for conversion to that shown in the schedule
of advances/liabilities.
vii. Compare the information shown in the schedule (e.g., date of entry, creditor/
subscriber, amount of advance/ liability, etc.) to that shown in supporting
documents (e.g., duplicate copy of official receipt for cash advances, journal
voucher for non-cash advances).
viii. Obtain confirmation of the advances/ liabilities. Compare amount confirmed
with that shown in the schedule.
ix. “Verify” further the utilization of the proceeds from advances (if in cash)
and state result of the “verification” in the report.
Submit as part of the documents:
i. Management’s representation signed under oath by the President/ Chief Executive
Officer and Treasurer/ Chief Financial Officer stating the following:
(1) That all information and representations contained in the submitted
application and its supporting documents and true and correct;
(2) That the “verification” procedures required by the Commission were
conducted by an independent auditor who issued a report thereon in
accordance with the standards in force;
(3) That the items/accounts subject of the application are authorized, valid and
legal; and
(4) That the shares of stock to be issued are not watered (if the subject
application pertains to an increase in capital stock).
The management hereby authorizes the Commission to examine any time, even
after the approval of the application, the company’s books of accounts and records
to determine the validity and accuracy of the transaction.
ii. Auditor’s Representation Letter to the SEC Accompanying the Agreed-Upon
Procedures Report.
14. PAPS 1003Ph
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Appendix 2
Example Auditor’s Reports on Agreed-Upon Procedures Engagements
• Example A: Illustrative report on an agreed-upon procedures engagement in
connection with an entity’s application for an increase in its authorized
capital stock, with no omission or modification of any required SEC
procedures
• Example B Illustrative report on agreed-upon procedures engagement in
connection with an entity’s application for an increase in its authorized
capital stock involving cash payment for subscriptions, with omission
and modification of some required SEC procedures
• Example C Illustrative report on agreed-upon procedures engagement in
connection with an entity’s application for an increase in its authorized
capital involving application of previously-recorded advances as
payment for subscriptions or conversion of previously-recorded
advances to equity, with omission of required SEC procedure
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Appendix 2
Report of Factual Findings
[Appropriate Addressee]
We have performed the procedures agreed upon with you and enumerated below with
respect to the cash payment for subscriptions by XYZ Company to ABC Corporation
[or advances from XYZ Company to ABC Corporation to be applied as payment for
stock subscriptions and/or converted to equity of XYZ Company] as of [date], set forth
in the accompanying schedule of [state title]. Our engagement was undertaken in
accordance with Philippine Standards on Related Services (PSRS) 4400,
“Engagements to Perform Agreed-Upon Procedures Regarding Financial
Information.” The procedures we performed were in accordance with the procedures
required by the Securities and Exchange Commission (SEC) in connection with the
application of ABC Corporation with the SEC for an increase in its authorized capital
stock.
We report our findings below6
:
1. Obtained from the company a schedule of cash received as deposits for
subscription on the proposed increase in capital for the period from January 1,
2007 (incorporation date) to December 31, 2007, which showed the following
information:
- Date recorded in the books
- Official receipt number
- Name of subscriber
- Amount of cash received
- Form of payment (cash or check) with copies of the official receipts attached
to the schedule.
We found no exceptions.
6
These are just examples of findings that are provided for illustrative purposes.
Example A:
Illustrative report on an agreed-upon procedures engagement in connection with
an entity’s application for an increase in its authorized capital stock, with no
omission or modification of any required SEC procedures
16. PAPS 1003Ph
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Appendix 2
2. Checked the mathematical accuracy of the schedule of cash received.
We found the addition to be correct and the amounts to be in agreement with the
covering bank deposit slips and with the corresponding entries in the covering
bank statements.
3. Compared the balance of the deposits for subscription to the balance in the
general ledger.
We found that the amount in the general ledger was not the same. However, we
were provided with a reconciliation statement which indicated that an amount of
P xxx still had to be recorded in the general ledger.
4. [to provide other findings]
Because the above procedures do not constitute either an audit or a review made in
accordance with Philippine Standards on Auditing, we do not express any assurance
on the cash payment for subscriptions by XYZ Company [or advances from XYZ
Company] as at [state date].
Had we performed additional procedures or performed an audit or review of the
financial statements in accordance with Philippines Standards on Auditing, other
matters might have come to our attention that would have been reported to you.
Our report is intended solely for submission to the Securities and Exchange
Commission in connection with the application of ABC Corporation for an increase in
its authorized capital stock and is not to be used for any other purpose or to be
distributed to any other parties. This report relates only to the cash payment for
subscriptions by XYZ Company [or advances from XYZ Company] as specified above
and do not extend to the financial statements of ABC Corporation, taken as a whole.
[Auditor’s signature]
[Date of the auditor’s report]
[Auditor’s address]
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Appendix 2
Report of Factual Findings
[Appropriate Addressee]
We have performed the procedures agreed upon with you and enumerated below with
respect to the cash payment for subscriptions by XYZ Company to ABC Corporation
as of [date], set forth in the accompanying schedule of [state title]. Our engagement
was undertaken in accordance with Philippine Standards on Related Services
(PSRS) 4400, “Engagements to Perform Agreed-Upon Procedures Regarding
Financial Information.” The procedures we performed were in accordance with the
procedures required by the Securities and Exchange Commission (SEC) in connection
with the application of ABC Corporation with the SEC for an increase in its
authorized capital stock, except for a procedure that was not performed and a
procedure that was modified, as agreed upon with you and as explained in the
following paragraphs.
A cash count was not performed as the cash payment for stock subscriptions was
already deposited in the bank account of ABC Corporation. However, as provided in
the required SEC procedures, we traced the amount received to the corresponding
bank validated slips and to the bank statement.
The SEC requires that all entries in the cash disbursements book of ABC Corporation
be inspected for any prior disbursements to XYZ Company that could be linked or
associated with its payment for subscription, as well as for any subsequent
disbursement, advances or loans granted to it by ABC Corporation without specifying
the periods to be covered by the inspection. In this regard, we have agreed with the
management of ABC Corporation to limit the periods to be covered by the inspection
to three months before
Example B:
Illustrative report on an agreed-upon procedures engagement in connection with
an entity’s application for an increase in its authorized capital stock involving cash
payment for subscriptions, with omission and modification of some required SEC
procedures
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Appendix 2
and three months after [date], the date ABC Corporation received the cash payment
for subscription from XYZ Company (alternative wording when the date of the
auditor’s report comes earlier than three months after the date the cash payment was
received:.. “three months before [date], the date ABC Corporation received the cash
payment for subscription from XYZ Corporation, and the period after that date up
to[date], the date of the auditor’s report”).
●
We report our findings below:
[To provide details of factual findings or the absence thereof]
Because the above procedures do not constitute either an audit or a review made in
accordance with Philippine Standards on Auditing, we do not express any assurance
on the cash payment for stock subscriptions made by XYZ Company as at [state date].
Had we performed additional procedures or performed an audit or review of the
financial statements in accordance with Philippine Standards on Auditing, other
matters might have come to our attention that would have been reported to you.
Our report is intended solely for submission to the Securities and Exchange
Commission in connection with the application of ABC Corporation for an increase in
its authorized capital stock and is not to be used for any other purpose or to be
distributed to any other parties. This report relates only to the cash payment for
subscriptions by XYZ Company to ABC Corporation, as specified above and do not
extend to the financial statements of ABC Corporation, taken as a whole.
[Auditor’s signature]
[Date of the auditor’s report]
[Auditor’s address]
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Appendix 2
Report of Factual Findings
[Appropriate Addressee]
We have performed the procedures agreed upon with you and enumerated below with
respect to the advances from XYZ Company to ABC Corporation to be applied as
payment for subscriptions by [or to be converted to equity of] XYZ Company as of
[date], set forth in the accompanying schedule of [state title]. Our engagement was
undertaken in accordance with Philippine Standards on Related Services (PSRS)
4400, “Engagements to Perform Agreed-Upon Procedures Regarding Financial
Information.” The procedures we performed were in accordance with the procedures
required by the Securities and Exchange Commission (SEC) in connection with the
application of ABC Corporation with the SEC for an increase in its authorized capital
stock, except for a procedure that was not performed as agreed upon with you and as
explained in the following paragraph.
We were unable to perform the identification of the subsequent utilization of the
proceeds from advances from the dates the advances were received to [date of report].
The advances represent an accumulation of amounts received over a period of
approximately 15 years and records and documents that will indicate the actual
subsequent utilization of the said advances were no longer available. Moreover,
based on our observation about the Company’s practices, cash coming from several
sources are commingled in the Company’s bank accounts and it would not be
practicable to try to identify the subsequent specific utilization of the advances from
XYZ Company.
We report our findings below:
[To provide details of the factual findings or the absence thereof]
Example C:
Illustrative report on an agreed-upon procedures engagement in connection with
an entity’s application for an increase in its authorized capital stock involving
application of previously-recorded advances as payment for subscriptions, or
conversion of previously-recorded advances to equity, with omission of required
SEC procedure
20. PAPS 1003Ph
20
Appendix 2
Because the above procedures do not constitute either an audit or a review made in
accordance with Philippine Standards on Auditing, we do not express any assurance
on the advances from XYZ Company as at [state date].
Had we performed additional procedures or performed an audit or review of the
financial statements in accordance with Philippines Standards on Auditing, other
matters might have come to our attention that would have been reported to you.
Our report is intended solely for submission to the Securities and Exchange
Commission in connection with the application of ABC Corporation for an increase in
its authorized capital stock and is not to be used for any other purpose or to be
distributed to any other parties. This report relates only to the advances from XYZ
Company to be applied as payment for subscriptions by [or to be converted into
equity of] XYZ Company, as specified above and do not extend to the financial
statements of ABC Corporation, taken as a whole.
[Auditor’s signature]
[Date of the auditor’s report]
[Auditor’s address]
21. PAPS 1003Ph
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Appendix 3
Illustrative Auditor’s Representation Letters
• Illustration A Illustrative representation letter to the SEC of an independent
certified public accountant in connection with an entity’s
application for an increase in its authorized capital stock, with no
omission and modification of any required SEC procedures
• Illustration B Illustrative representation letter to the SEC of an independent
certified public accountant in connection with an entity’s
application for an increase in its authorized capital stock involving
cash payment for subscriptions, with omission and modification of
some required SEC procedures
• Illustration C Illustrative representation letter to the SEC of an independent
certified public accountant in connection with an entity’s
application for an increase in its authorized capital stock involving
application of previously recorded advances as payment for
subscription or their conversion to equity, with omission of a
required SEC procedure
22. PAPS 1003Ph
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Appendix 3
To the Securities and Exchange Commission
In connection with the application of ABC Corporation for increase in its authorized
capital stock, the undersigned declares:
(1) That, as an external auditor engaged by ABC Corporation we have performed the
procedures for conversion of advances into equity [and/or for cash payment for
subscriptions] set forth in SEC Memorandum Circular No. 6, Series of 2008, and
as agreed upon with the Company, relating to ABC Corporation’s application
with the Securities and Exchange Commission for an increase in its authorized
capital stock as of [date] and in accordance with Philippine Standards on Related
Services (PSRS) 4400, “Engagements to Perform Agreed-Upon Procedures
Regarding Financial Information.”
(2) That since the foregoing engagement does not involve an audit or review of the
company’s financial statements but only the conduct of a set of agreed-upon
procedures and issuance of a report on the factual findings thereon, we gave a “no
assurance” statement in our [date] report attached to this letter. We understand,
however, that the “no assurance” statement in our said report does not exempt us
from responsibility over the conduct of the said procedures and the factual
findings stated therein as provided in PSRS 4400.
[Name and signature of the auditor]
[Auditor’s BOA Registration No.]
[Auditor’s SEC Accreditation No.]
Illustration A:
Illustrative representation letter to the SEC of an independent certified public
accountant in connection with an entity’s application for an increase in its
authorized capital stock, with no omission or modification of any required SEC
procedures
23. PAPS 1003Ph
23
Appendix 3
To the Securities and Exchange Commission
In connection with the application of ABC Corporation for an increase in its
authorized capital stock, the undersigned declares:
(1) That, as an external auditor engaged by ABC Corporation, we have performed the
procedures for cash payment for subscriptions set forth in SEC Memorandum
Circular No. 6, Series of 2008, relating to ABC Corporation’s application with the
Securities and Exchange Commission for an increase in its authorized capital
stock as of [date] and in accordance with Philippine Standards on Related
Services (PSRS) 4400, “Engagements to Perform Agreed-Upon Procedures
Regarding Financial Information,” except, as agreed upon with the Company, for
a procedure that was not performed and another procedure that was modified as
fully explained in our accompanying report dated [state date].
(2) That since the foregoing engagement does not involve an audit or review of the
company’s financial statements but only the conduct of a set of agreed- upon
procedures and issuance of a report on the factual findings thereon, and because
we were not able to perform certain SEC-required procedures as mentioned
above, we gave a “no assurance” statement in our [date] report attached to this
letter. We understand, however, that the “no assurance” statement in or said
report does not exempt us from responsibility over the conduct of the said
procedures and the factual findings stated therein as provided in PSRS 4400,
except for a procedure that was not performed and another procedure that was
modified as stated above and fully explained in our report.
[Name and signature of the auditor]
[Auditor’s BOA Registration No.]
[Auditor’s SEC Accreditation No.]
Illustration B:
Illustrative representation letter to the SEC of an independent certified public
accountant in connection with an entity’s application for an increase in its
authorized capital stock involving cash payment for subscriptions, with omission and
modification of some required SEC procedures
24. PAPS 1003Ph
24
Appendix 3
To the Securities and Exchange Commission
In connection with the application of ABC Corporation for an increase in its
authorized capital stock, the undersigned declares:
(1) That, as an external auditor engaged by ABC Corporation, we have performed the
procedures for application of advances as payment for subscriptions [or
conversion of advances into equity] set forth in SEC Memorandum Circular
No. 6, Series of 2008, relating to ABC Corporation’s application with the
Securities and Exchange Commission for an increase in its authorized capital
stock as of [date] and in accordance with Philippine Standards on Related
Services (PSRS) 4400, “Engagements to Perform Agreed-Upon Procedures
Regarding Financial Information,” except, as agreed upon with the Company, for
a procedure that was not performed as it was not practicable to do and as fully
explained in our accompanying report dated [state date].
(2) That since the foregoing engagement does not involve an audit or review of the
company’s financial statements but only the conduct of a set of agreed-upon
procedures and issuance of a report on the factual findings thereon, and because
we were not able to perform certain SEC-required procedures as mentioned
above, we gave a “no assurance” statement in our [date] report attached to this
letter. We understand, however, that the “no assurance” statement in our said
report does not exempt us from responsibility over the conduct of the said
procedures and the factual findings stated therein as provided in PSRS 4400,
except for a procedure that was not performed as stated above and fully explained
in our report.
[Name and signature of the auditor]
[Auditor’s BOA Registration No.]
[Auditor’s SEC Accreditation No.]
Illustrative C:
Illustrative representation letter to the SEC of an independent certified public
accountant in connection with an entity’s application for an increase in its
authorized capital stock involving application of advances as payment for
subscriptions or conversion of advances into equity, with omission of a required
SEC procedure
25. PAPS 1003Ph
25
This PAPS 1003Ph, “Guidance in Dealing with Reports Required by the SEC Relating to
Increase in Capital Stock of a Corporation,” was unanimously approved for adoption on
June 29, 2009 by the members of the Auditing and Assurance Standards Council.
Benjamin R. Punongbayan, Chairman
Felicidad A. Abad Antonio P. Acyatan
Erwin Vincent G. Alcala Froilan G. Ampil
David L. Balangue Ma. Gracia F. Casals-Diaz
Eliseo A. Fernandez Judith V. Lopez
Jaime P. Naranjo Ma. Cecilia F. Ortiz
Nestorio C. Roraldo Joaquin P. Tolentino
Jaime E. Ysmael