TOTALACCOUNTING
BUSINESS DOCUMENTATION
REQUIRED FOR PREPARATION OF
FINANCIAL STATEMENTS FOR AUDIT
/ WITH AUDIT NOT REQUIRED
TotalAccounting do not offer an Audit Service, but do offer a service of preparing
Financial Statements and preparing an Audit File for clients in readiness for an
Audit by an independent Accountant. TotalAccounting have offered an
Audit Service in the past, so have knowledge of what the Auditor will require.
Below
is a Checklist of Business Documentation Required for Preparation of Financial
Statements Ready for Audit.
It
may be the case that your organisation does not require a full audit with an
Audit Opinion, but that the preparation of Financial Statements which are signed
off by a Chartered Accountant are sufficient for your purpose. Either way
, the Checklist below details information that should be compiled to carry out
the service.
If
an audit is required, the process of collection of documentation for the
Preparer of the Financial Statements is an important process, and it is
important that it be carried out in a thorough manner, other wise hold-ups in
the entire Financial Statement Preparation/
Audit process will eventuate, and you may not achieve an unqualified Audit
Opinion.
The
Checklist below
summarises documentation that you should get together, if these items are
applicable to your organisation. It
is recommended that you thoroughly review these and prepare/ provide files of
all documentation requested as ourselves and the Auditor will require these for
the process. It is recommended that
you use the “Tick to Check” facility provided and tick off each item when
you have prepared it to ensure this. We
will review the documentation you have on hand at our first consultation with
yourselves to endeavour to establish shortfalls, and ask you for any further
information required, as we will need all this same documentation to assist in
the accurate preparation of Financial Statements, so it is recommended that and
would be favourable to yourselves to avoid any hold-ups in your service that you
review the attached documentation and ensure you have all items on hand as per
the attached Checklist before you present it to ourselves. If you discover on
this review that you are missing certain items it would be recommended that you
pursue the obtaining of copies for these, and if you note that you have not
finalised procedures as we have discussed in this documentation you should
complete them , before presentation to ourselves of your financial
documentation.
It
is recommended that you prepare all your files in an organised and methodical
manner, with sections for each type of documentation, before
presentation to ourselves and subsequently to the Auditor.
This will assist in quicker processing of the whole service.
It
should be remembered that an Audit Service, as well as verifying accuracy in
Financial Statements for the period, incorporates a review of Internal Controls
in financial systems to give the Auditor confidence, or recognise deficiencies,
in Internal Controls present in your Financial Systems, in order to assist in
the Opinion on the Financial Statements that the Auditor will consider and
present. To assist in a favourable
conclusion it is important that you introduce strong internal controls into your
financial systems. Important
measures you can take to illustrate the presence of adequate internal controls
are and which the Auditor looks for are:
·
That
you have systems in place to ensure that more than one person in your
organisation is involved in
your financial transactions (Preparer and Approver),
and there is evidence of this on the documentation provided.
·
That
all documentation applicable to your organisation as detailed in the attached
Checklist is on hand and provided to the Auditor.
Any gaps in this documentation will influence the Opinion that the
Auditor will conclude. Thus it is important that you collect and retain all the
financial documentation as detailed on the Checklist attached, and that you
review what you have before providing documentation to ourselves and the Auditor
and get copies of any documentation you don’t have on hand before presentation
to ourselves.
·
That
regular and frequent Meetings are held at your organisation and a Financial
Report is presented at these, and Payments made over the past period are
detailed in this, to indicate transparency of financial matters and payments
made to members and allow them the opportunity to query these.
·
A
significant time in an Audit service is devoted to perusing the evidence of
payments as this is an important part of audit verification.
For all Payments made, both by Cheque and other Payment methods the
Auditor should be provided with evidence in the form of Suppliers Invoices
totalling the amount of the Payment . Statements
only or Receipts that you paid an amount are insufficient as these do not
indicate what has been purchased- the Auditor needs the Invoices to confirm what
was being paid for and if it appropriate to your organisation.
·
That
there are not payments made out for “Cash” or “Koha” or “Wages” and
the like with no explanation of who they were paid to or what they were for.
Also if Cash Advances are made for whatever reason the Auditor will look
for Invoices/ Explanations for the amount of the Cash Advances, and will look
for explanations of the difference between the advanced amount and the amount
actually spent. Have they been
rebanked? On what day they were rebanked? etc.
You should provide explanations of the payments, and to whom the payments
were made, and any differences in
amounts advanced and spent on the Payment Vouchers as commented on below.
For
your payments processes it is recommended that you should also prepare a Payment
Voucher for every payment prior to making the payment, whether by cheque or
other payment method. The Suppliers Invoice/s pertaining to the payment should
be attached to this, two authorisations should be obtained prior to the payment
being made, and this also offers the facility of giving an explanation for every
payment (in the “Description of Goods/ Services” section) if for some reason
Suppliers Invoices are not available.
We
would recommend you use a Payment Voucher as per the following format, and that
you complete all fields in this, for every Payment made:
XXXX
(NAME OF YOUR ORGANISATION)
PAYMENT
VOUCHER
Date
Cheque
Number/ Reference
Amount
Suppliers
Name
Description
of the Goods/ Services Received
Prepared
by (signature of Authorised
Person) ……………………………….
Approved
by (signature of Authorised
Person)……………………………….
We
recommend that you print off this checklist and go through and use the
"Tick To Check" facility to ensure that you have all the required
documentation and information
BUSINESS DOCUMENTATION
REQUIRED FOR PREPARATION OF
FINANCIAL STATEMENTS FOR AUDIT
/ WITH AUDIT NOT REQUIRED
Print
off this document and check that you have all the financial
documentation below (if appropriate to your situation). Tick
in the right hand column to satisfy yourself that you have obtained or
prepared it.
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TICK TO CHECK |
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The
following information should be provided to TotalAccounting in relation to
the year end preparation of your Financial Statements ready for Audit.
 | The
previous and full set of Financial Statements / Fixed Asset and
Depreciation Schedule/ Notes to the Accounts/ Audit Management Letter
as at the previous balance date if TotalAccounting did not prepare
these Financial Statements.
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| The
Minute Book showing the Minutes of all Meetings during the financial
year for which the Financial Statements and Audit is being prepared.
Any separate Financial Reports prepared for the Meetings should also
be included.
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| Your
Data Recording Reports e.g. Manual/
Spreadsheet Cashbook ,
computerised General Ledger. Ensure
that all records for the whole of the financial year, for all Bank
Accounts, have been processed to this.
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| Manual/
Spreadsheet Cashbooks should have separate sections for Cash Payments
and Cash Receipts items with columns analysing the different category
types of Payments and Receipts. If you produce your Cashbook with a
computerised Accounting Programme, print out the Trial Balance at the
end of the year, plus a Detailed Transaction Ledger Report for
the total year (which
shows each Account in your Ledger and all the transactions for each
Account in your Ledger with dates, cheque etc. payment references,
narrations, amounts for each transaction). In this case ensure that
the Bank/s balances are reconciled on your Cashbook at the each of the
year with your Bank Statements, and you have a Bank Reconciliation
indicating this for each Bank Account.
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| Bank
Statements for all the Bank Accounts you have held during the
financial year, including any that have closed during the year.
Ensure that you provide all the Statements for the whole of the
financial year, from the year start date to the year end date.
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| If
you have held Investments during the financial year documentation
relating to any new investments, any re-investments you may have
carried out throughout the year, and which indicates their balance at
your balance date and interest or dividends received during the
financial year.
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| Cheque
Books for the whole of the financial year.
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| Banking
Deposit Books for the whole of the financial year. |
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If you have any
Loans from Financial Institutions , including any existing at start of
year, new and any that may
have terminated, Statements showing all the transactions from the
start date of the financial year to the end date of the financial
year. Ensure that these
Statements show the interest charges during the year and the closing
balance at the end of the year. |
| Your
Invoice Book for the whole of the financial year if you prepare
Invoices for your Charges to your customers, with these records for
the whole of the financial year. |
| Remittance
Advices received in relation to receipts from Payers during the
financial year.
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| Cash
Receipts Books for the financial year.
|
| The
Invoices from your Suppliers for Payments made for the whole of the
financial year by you. It
is important to have the Suppliers Invoices, as they indicate exactly
what has been purchased, which is what the Auditor has to verify
(Statements and Receipts indicating the amount paid do not). Ensure
that you have Payment Vouchers attached which are authorised by two
persons of authority and Suppliers Invoice Support documentation for
every Payment you have made during the financial year.
It is helpful if these are filed in month Payment order and in
cheque sequential order (for Cheque Payments) and in date order of
Payment (for items paid by non-cheque methods).
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| Wage
Books, if you have had employees on Wages, that show the Wage Records
for all employees during the year and monthly Wages Summaries and for
the whole of the financial year. If you use Computer Software for your
Wages all the printouts during the year from your system.
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| Copies
of all the IRD Returns prepared by yourself for all of your tax types
and filed with IRD.
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| All
the Assessments and Statements of Account (the blue forms) as issued
by IRD for all your tax types (e.g. GST. PAYE, FBT, KiwiSaver Employer
Contributions, KiwiSaver Employee Contribution, Student Loan etc).
These are required for the whole of the year from the year start date
to the year end date (as per the date of Date Issued stated by IRD on
these documents)
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| Any
other correspondence with IRD (to them or from them) during the year.
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| If
you prepare GST Returns with a computerised accounting programme the
GST Detail Reports (indicating the detail analysis of the figures on
the GST Returns) for all GST Returns for the year
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| Information
as to balances of Cash on Hand at balance date e.g. Till Change,
Unbanked Takings, Petty Cash Float.
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| Your
Petty Cash recording during the financial year e.g.
Petty Cash Book.
|
| Review
the Fixed Assets Schedule on the Financial Statements for the previous
balance date. Prepare
a list of those items not on hand at the current balance date and
indicate reason e.g. sold and sale price, written off etc. |
| Remittance
Advices received in relation to receipts from Payers during the
financial year.
|
| Cash
Receipts Books for the financial year.
|
| The
Invoices from your Suppliers for Payments made for the whole of the
financial year by you. It
is important to have the Suppliers Invoices, as they indicate exactly
what has been purchased, which is what the Auditor has to verify
(Statements and Receipts indicating the amount paid do not). Ensure
that you have Payment Vouchers attached which are authorised by two
persons of authority and Suppliers Invoice Support documentation for
every Payment you have made during the financial year.
It is helpful if these are filed in month Payment order and in
cheque sequential order (for Cheque Payments) and in date order of
Payment (for items paid by non-cheque methods).
|
| Wage
Books, if you have had employees on Wages, that show the Wage Records
for all employees during the year and monthly Wages Summaries and for
the whole of the financial year. If you use Computer Software for your
Wages all the printouts during the year from your system.
|
| Copies
of all the IRD Returns prepared by yourself for all of your tax types
and filed with IRD.
|
| All
the Assessments and Statements of Account (the blue forms) as issued
by IRD for all your tax types (e.g. GST. PAYE, FBT, KiwiSaver Employer
Contributions, KiwiSaver Employee Contribution, Student Loan etc).
These are required for the whole of the year from the year start date
to the year end date (as per the date of Date Issued stated by IRD on
these documents)
|
| Any
other correspondence with IRD (to them or from them) during the year.
|
| If
you prepare GST Returns with a computerised accounting programme the
GST Detail Reports (indicating the detail analysis of the figures on
the GST Returns) for all GST Returns for the year
|
| Information
as to balances of Cash on Hand at balance date e.g. Till Change,
Unbanked Takings, Petty Cash Float.
|
| Your
Petty Cash recording during the financial year e.g.
Petty Cash Book.
|
| Review
the Fixed Assets Schedule on the Financial Statements for the previous
balance date. Prepare
a list of those items not on hand at the current balance date and
indicate reason e.g. sold and sale price, written off etc. |
|
A list of your Accounts Payable as at the end of the financial year.
That is, amounts you owed as at the last day of the financial
year but which were paid for by you after that date.
Please list these in the following headings- Date Paid, Cheque
Number (or other Payment Reference), Paid To, What For, Amount
including GST. |
| Relating
to this Accounts Payable Listing provide copies of all the Supplies
Invoices for each of the items you have included in this List.
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| A
list of your Accounts Receivable as at the end of the financial year.
That is, amounts owed to you as at the last day of the
financial year but which were paid to you after that date.
Please list these in the following headings- Date Received,
Debtor (person/ entity who owes the money), Relates To (income type),
Amount including GST
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| Relating
to this Accounts Receivable Listing provide copies of all the Invoices
you have created, or evidence of documentation relating to the amounts
from the Debtor (e.g. Remittance Advices, Payment Summaries) ,
relating to each of the items you have included in this List. |
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If
you have Stock on Hand for Resale you should undertake a count of
Stock at balance date. This
should be valued at lower of cost or market value (excluding GST).
Your Stock Sheets and Calculation Detail should be provided. |
| Loan
Agreement Documentation from the Financial Institution for all Loans
entered into during the year. If an Accountant other than
TotalAccounting prepared your Audit and Financial Statements to the previous year
balance date and you had
Loan Agreements in place in that previous financial year and these are
still in place in this current financial year provide the Loan
Agreement relating to this/ these.
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| Hire
Purchase Agreement Documentation for new Hire Purchase Agreements
entered into during the financial year.
If an Accountant other than TotalAccounting prepared your Audit
and Financial Statements to the previous year balance date and you had
Hire Purchase Agreements in place in that previous financial year and
these are still in place in this current financial year please provide
the Hire Purchase Agreement relating to this/ these.
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| Your
Insurance File showing all Insurance correspondences, documentation
indicating items insured and insurable values, Invoices from your
Insurance Companies (if they are not in your Suppliers Invoices File)
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| If
there are any matters during the financial year for which you
required, or have engaged , legal advice, or any legal matters that
are pending at balance date, any documentation/ correspondence
pertaining to these.
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| If
there are any events subsequent to balance date which have relevance
to the year of audit, any documentation/ correspondence pertaining to
these. |
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Any other financial
documentation not detailed above which is applicable to your
organization. |
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