Audit Program for Liabilities

Company:
Balance Sheet Date:

AUDIT OBJECTIVES FINANCIAL STATEMENT

ASSERTIONS
To determine that all existing liabilities are properly recorded
and shown in the balance sheet.
To determine that all recorded liabilities are existing liabilities Completeness
of the company as of the balance sheet date. Existence or Occurrence
Rights and obligations
To ascertain that liabilities are properly classified in the balance Presentation and disclosure
sheet and adequate disclosures made in accordance with IAS.
To ascertain that transactions are duly approved and complete
with supporting documents.

AUDIT PROCEDURES PERFORMED WORKPAPER

BY REFERENCE
1. Performing Analytical Review Procedures
a. Compare current-period liability amounts to prior period
balances and investigate unusual fluctuations.
b. Review general ledger account activity and investigate any
entries that appear unusual.
2. Verification and Valuation of Trade Creditors
a. Compare the percentage of gross profits to purchase with that
of the previous years to verify the correctness of purchases.
b. Obtain a Schedule of creditors and verify them with the
balances of the ledger accounts and statements of account received
from creditors.
c. Check the Purchases Book and Purchases Returns Book with the
help of invoices, credit notes, etc. Also, check the postings into the
ledger.
d. See that all the purchases made during the year have been
accounted for especially at the end of the year.
e. Examine the discount allowed to creditors during the period and
see that these substantiate the credit balances.
f. Examine the entries made at the beginning as well as at the end
of the year to check the employees have passed any fictitious entries
in this regard.

3. Verification and Valuation of Bills Payable

a. Obtain a Schedule of bills payable and its totals should be
compared with the Bills Payable Book and Bills Payable Account.
 b. Examine the bills paid after the balance sheet date with the
entries passed in the Cashbook.
c. Obtain confirmatory statements from the drawers directly with
the permission of the client.
4. Verification and Valuation of Loans
a. Verify the existence of loans, if any.
b. Ascertain the terms of loan, amount of loan, period and nature
of loan, etc. by referring to the loan agreement.
c. Confirm the balances of the unpaid loans directly from the
creditors of the company with the permission of the client.
d. Obtain and examine an agreement with the bank and a
certificate to that effect in case of loans or overdrafts.
e. See whether the interest due has been paid or not.
5. Verification and Valuation of Outstanding Liabilities for Expenses
a. Obtain a certificate from a responsible officer of the company
stating that all expenses become payable have been brought into
account.
b. See whether necessary provisions have been made by checking
receipts and other vouchers.
c. Compare the expenses shown as unpaid during the current year
with those of the last year.
6. Verification and Valuation of Income Received in Advance
a. Verify whether the items are recorded in books
b. Obtain a Certified Schedule of income received in advance and
verify the same.
7. Verification and Valuation of Taxation Liability
a. See whether the provision made therefore is sufficient to meet
the estimated liability.

CONCLUSION:

We have performed procedures sufficient to achieve the audit objectives for liabilities, and the
results obtained from these procedures are adequately documented in the accompanying
workpapers.

Performed by: Date:

Reviewed and approved by: Date: