• Nature, timing and extent of audit procedures performed and results of such procedures. Deficiencies detected included absence of any evidence of work done in respect of deferred tax, trade receivables and tax losses. Absence of evidence relating to work done to verify the assumptions used in measuring defined benefit obligations and a capital gain on equity investments were also noted.
• Planning of the audit and the audit programme.
• Auditor’s understanding of the industry and the economic and legal environment in which the entity operates.
• The Auditor’s understanding of the accounting and internal control systems.
• Sampling techniques used by the Auditor.
• Analyses of transactions and balances.
• Analyses of significant ratios and trends.
• Identified and assessed risks of material misstatements at the financial statement and assertion level.
• Evidence that the work performed by assistants was supervised and reviewed.
• Conclusions reached by the Auditor concerning significant aspects of the audit, including how exceptions and unusual matters were resolved and treated.

• Not performing any audit procedures to test the financial statement assertions relating to receivables, payables, related party balances and contingent liabilities.

• Failure to undertake substantive procedures to ascertain the recoverability of investments in and receivables from subsidiaries.

• Relying merely on a confirmation from the Company which stated the value of the inventory without undertaking any substantive procedures to ascertain such valuation.

• Not conducting procedures to ascertain the adequacy of provisioning for interest receivables and for investments in preference shares despite such balances being identified as non-recoverable.

• Not verifying the computation of a gain resulting from change in ownership of a subsidiary.

• Revaluing a leasehold land held under an operating lease and recognising as finance lease.
• Considering an incorrect value as the cost of investment property.
• Non-compliance with significant disclosure requirements in respect of a finance company.
• Not recognising impairment of investments and receivables.
• Not adopting the equity method for investments in associates.
• Recognising and presenting investment property as property, plant and equipment.

• Transactions with a subsidiary
• Short-term loans granted and settled during the year

• Accepting the external valuers results as the appropriate value without assessing the reasonableness of the values based on the Auditor’s understanding of the entity and its environment and whether the estimates are consistent with other audit evidence obtained during the audit when a property acquired had been revalued in the year of acquisition recognising an excessive gain.
• Failure to test significant assumptions, the valuation model and underlying data when the gain on valuation of biological assets and real estate had been significant.
• Considering the value derived by an inappropriate method adopted by the management as the appropriate value of such property.

Audit documentation of majority of the firms reviewed did not provide a sufficient and appropriate record of the basis of the Auditor’s Report. In most cases, the documentation did not provide evidence that the audit was planned and performed in accordance with the Standards. The working papers lacked evidence relating to overall audit strategy and planning to test assertions made in the financial statements. Inadequate identification and disclosure of related party transactions and failure to evaluate the work of experts in the light of the Auditor’s overall knowledge of the business were observed in some of the audits. Further, certain audit reports were not prepared in compliance with the relevant standard relating to the Auditor’s Report.