A Donor has appointed you as an auditor for ensuring financial management capacity of the NGO before funding made to the NGO to rely on the fund operating capability of the NGO. What would be your special focus area for such assignment?

Auditing and Assurance Revision Questions and Answers

Answer
For ensuring financial management capacity of the NGO my special focus area would be:

i. To ensure whether adequate internal control system for accounting administration has been existed within the organization.

ii. To ensure the required experiences & academic qualification of accounting staff.

iii. To ensure the volume of donors‟ fund previously operated the NGO.

iv. To ensure the adequacy of policies etc. (like accounting manual, chart of account, financial & administrative regulation, software is in place & adequate).

v. To see the annual audit report, internal audit report & other types of audit report for ensuring serious and risky areas if any to pay due attention.

vi. To ensure the basic accounting concept of non-accounting staff for handling the advances.

vii. To see overall account of the NGO, whether there is any diversion of project fund to institutional fund through any unfair means.

viii. To see the composition of program cost & office running cost for ensuring whether office running cost mainly salary is excessively high than program cost.

ix. To the composition of common cost (cost shared different donors) in past period to ensure that whether same cost has been borne different donors in books of accounts.

x. To ensure whether periodical reconciliation (bank/cash/fund etc.) system are in place.

xi. To ensure whether budgetary control system is in place.

xii. To ensure whether there is excessive turnover of the accounting staff.

xiii. To ensure whether proper & adequate delegation of authority has been made and properly exercised in practice.



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