Instructions:
1 The Process Note provided herein is illustrative in nature.
2 Document all the process notes under "2.05-System Documentation" in APT NG.
Audit Team to give reference / tag this workpaper in the APT NG at Stage II : UIC - CARA and & ITGC Risk Assessment
Questionnaire as relevant.
2 Audit Team should understand the process and identify the controls implemented and followed by the client through inquiry or observation.
3 Audit Team should conduct walkthroughs to re-affirm the process and control as understood through inquiry or observation.
4 Audit Team shall list down the controls in the format specified under "[Link].01".
5 Document your understanding of the business processes in the cycle including the following:
- Processes by which transactions are initiated, processed, recorded and reported
- Controls in place to prevent, or detect and correct, errors (including how detailed records are reconciled to the general ledger)
- Staff members, information systems, supporting documents and accounting records directly related to this process.
6 Identify any Information Produced by the Entity (IPE) that will be used in CARA or in obtaining audit evidence (TOCs, DATs or OSPs) (if
applicable).
7 Identify any IT applications that support the process. Ensure all IT applications identified are documented in the relevant question in the IT
Environment template, the Simple UIC-CARA & ITGCs, and/or the ITGC Risk Assessment questionnaire.
8 The process mentioned in "[Link].01" should be modified in accordance with the actual process followed by the client.
9 Determine whether the control identified meets the definition of a 'Control activity relevant to the audit' ('CARA').
10 Decide whether the controls as noted in "[Link].01" are 'Controls Relevant to Audit' (CARA). If yes, document the controls in the
UIC - CARA and & ITGC Risk Assessment Questionnaire as relevant along with appropriate details. In case the controls do not
satisfy the definition of CARA, no further action is required.
11 For all CARA, document the following:
- CARA # - assign each CARA a number so it is easy to cross reference to it later.
- Frequency - how often does the control operate?
- Control owner - Title/position of person responsible for the control.
- FSA/Assertion - List all FSAs and assertions relevant to the control.
- the IT application that the CARA depends on (if any)
- Is the control manual, automated, or computer dependent?
- Is the control preventive or detective?
12 Evaluate design and implementation of CARA.
13 Consider the need to raise potential RMMs (whether IRMMs or ELRs) in APT if a control deficiency has ben identified. Also record
the control deficiencies in the ETD Points, Management Letter Points and TCWG Points screens in APT. Unless otherwise
addressed, such findings will be evaluated at the Engagement Team Discussion.
14 Document CARA and plans to perform TOCs in the Control Detail screen in APT.
15 Ensure correct conclusion is drawn on the basis of process understanding and walkthroughs performed.
16 Use the Link document feature to link the relevant working paper and document.
17 Rename the sheet "[Link].01" as per document number reflected in APT.
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
CLIENT NAME
DOCUMENT NAME Process Note
BUSINESS CYCLE Expenses
PERIOD END
DOCUMENT #
<Objective>
To obtain an understanding of the entity's Expenses - Manufacturing Expenses/ Administrative & Other Expenses/ Interest
Expenses cycle processes including the internal control activities in place that are relevant to the audit. In this working paper, we will
evaluate the adequacy of the control designs and update in APT .
<Work Done>
Date of Discussion
Venue
M S K A / M S K C Representatives
/ Designations
Client Representatives /
Designations
<Guidance>
1. Engagement Teams should ensure that all the controls that are identified and documented from this walkthrough documentation
workpaper match with the corresponding risks and controls documented in the "APT Risks and Responses screen", and which will be
further tested by the teams in the TOC workpapers (in Execution stage).
2. When auditing various group entities, the Engagement Teams should ensure that walkthrough documentation of the process and related
risks and controls is done separately, for each group entity.
INITIATION PROCESS(ES) DESCRIPTION OF THE PROCESS
PROCESSING
AUTHORISATION
RECORDING
REPORTING
Initiation A. Raising of Purchase - Request for the Expense is raised by ___________
Requisition (“PR”) to - The PR is approved by Procurement Head______
Purchase order creation '- Agreements is prepared by the ___________/PO is prepared by
(PO) _____________.
'- Vendor List available as on___________ approved by ____________
- Quotations are received from 3 (or any other number) vendors
___________
- Multiple Quotations received are compared and shortlisted by
_________. __________ is required to complete a checklist for comparison
of various quotations available with the Company.
- Quotation selected and selection evaluation checklist is approved by
___________.
- Such agreement/PO is approved by ___________ on verifying the PR,
quotations and any other such supporting documents.
Initiation D. Vendor master - For all new vendor creation in the accounting software supporting
creation and review documents of identification are obtained for authorisation by _______
- The vendor creation form is approved by ________
- On verification of the approved creation forms and supporting
documents, the code is generated by _______.
Processing, Correction and E. Accounting of - Expense bill is received by ____________.
Recording expense invoice - The Expense is then approved by __________.
- The accounting for TDS,Service Tax, VAT is reviewed and verified by
__________.
- For any corrections, request for changes and approval are made
to_________
- For any TDS, GST to be reported in the returns are reviewed and
approved by_____
Accounting entry for is passed ____________ and approved by __________.
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
<Objective>
To obtain an understanding of the entity's Expenses - Manufacturing Expenses/ Administrative & Other Expenses/ Interest
Expenses cycle processes including the internal control activities in place that are relevant to the audit. In this working paper, we will
evaluate the adequacy of the control designs and update in APT .
<Work Done>
Date of Discussion
Venue
M S K A / M S K C Representatives
/ Designations
Client Representatives /
Designations
<Guidance>
1. Engagement Teams should ensure that all the controls that are identified and documented from this walkthrough documentation
workpaper match with the corresponding risks and controls documented in the "APT Risks and Responses screen", and which will be
further tested by the teams in the TOC workpapers (in Execution stage).
2. When auditing various group entities, the Engagement Teams should ensure that walkthrough documentation of the process and related
risks and controls is done separately, for each group entity.
INITIATION PROCESS(ES) DESCRIPTION OF THE PROCESS
PROCESSING
AUTHORISATION
RECORDING
REPORTING
Processing, Recording and F. Payments - Payment for Expense is processed on the basis of approval of expense.
Reporting - Payment is approved by _____.
- TDS is deducted before processing of payment
- The amount payable is directly credited into the books of vendor
through RTGS / NEFT OR Cheque is drawn in favour of the vendor and
dispatched through courier.
- At the end of the period/month/year, Calculation for provision for
expense is prepared on the basis of past experience, is prepared by
_________ and is approved by ___________
TDS deducted and to be reported in TDS returns are reviewed and
verified by_________
- TDS is appropriately deducted on the provisions.
Processing and Recording G. Expense provision Ledgers to be scrutinized, analysis of budget and past trends by the
control owner to ensure expenses pertaining to a particular month have
been accounted for and appropriate provisions are made on the basis of
above analysis and the same is reviewed by _____________ (Designation).
In case where the bills are not received, provisions for such expenses
are made in the books of accounts by _____team only on the basis of
written approval received from the respective department and the same
is further approved by ____________ (Designation).
Processing and Recording H. Prepaid expense ____________ (Designation) is recording all relevant prepaid expenses
and transfer of all the prepaid expenses after the month end to the
respective expense GL and same is reviewed by _____________
(Designation).
<Conclusion>
Based on the work done, we are satisfied that the control designs are ……
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
DEPARTMENT(S IPE IS THE IPE PART WKP Wkp reference IT CONTROL CONTROL
) PRODUCED IN OF THE CARA REFERENCE to Testing APPLICATION( (C ) / PROCESS OWNER
THE CYCLE IDENTIFIED IN TO THE AUDIT procedures S) (P)
(IF USED TO THIS PROCEDURES performed on SUPPORTING (NAME AND
OBTAIN WALKTHROUGH (TOC, DATS IPE and THE PROCESS DESIGNATION)
EVIDENCE IN EXERCISE? If yes, OR OSPs ) conclusions
DATS OR provide details WHICH USE thereon
OSPs) of the IPE THE
IDENTIFIED
IPE
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
DEPARTMENT(S IPE IS THE IPE PART WKP Wkp reference IT CONTROL CONTROL
) PRODUCED IN OF THE CARA REFERENCE to Testing APPLICATION( (C ) / PROCESS OWNER
THE CYCLE IDENTIFIED IN TO THE AUDIT procedures S) (P)
(IF USED TO THIS PROCEDURES performed on SUPPORTING (NAME AND
OBTAIN WALKTHROUGH (TOC, DATS IPE and THE PROCESS DESIGNATION)
EVIDENCE IN EXERCISE? If yes, OR OSPs ) conclusions
DATS OR provide details WHICH USE thereon
OSPs) of the IPE THE
IDENTIFIED
IPE
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
DOES CONTROL MEET CARA TITLE AND FINANCIAL ASSERTION(S) TYPE OF PREVENTIVE/
THE DEFINITION OF DESCRIPTION STATEMENT CONTROL DETECTIVE
CARA? AREA(S) (Manual(M) /
(If Yes, Evaluate Computer
Columns IF YES, FILL IN Dependent(CD)
COLUMNS M TO AA) /
(If NO, no further action Automated(A))
is to be taken)
C E A V P
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
DOES CONTROL MEET CARA TITLE AND FINANCIAL ASSERTION(S) TYPE OF PREVENTIVE/
THE DEFINITION OF DESCRIPTION STATEMENT CONTROL DETECTIVE
CARA? AREA(S) (Manual(M) /
(If Yes, Evaluate Computer
Columns IF YES, FILL IN Dependent(CD)
COLUMNS M TO AA) /
(If NO, no further action Automated(A))
is to be taken)
C E A V P
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
FREQUENCY EVALUATE THE DESIGN EVALUATE THE WHETHER THE DESIGN IF RESPONSE TO
OF CARA IMPLEMENTATION OF CARA AND IMPLEMENTATION COLUMN Z IS 'NO'
(DOCUMENT HOW CARA (DOCUMENT OF CARA IS THEN WHETHER
MEETS CONTROL CORROBORATIVE EVIDENCE EFFECTIVE? (IF NO, RISK IS
OBJECTIVE) TO SUPPORT CORRECT CONSIDER POTENTIAL IDENTIFIED IN
IMPLEMENTATION OF CARA) IRMM) APT? (Y/N)
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
FREQUENCY EVALUATE THE DESIGN EVALUATE THE WHETHER THE DESIGN IF RESPONSE TO
OF CARA IMPLEMENTATION OF CARA AND IMPLEMENTATION COLUMN Z IS 'NO'
(DOCUMENT HOW CARA (DOCUMENT OF CARA IS THEN WHETHER
MEETS CONTROL CORROBORATIVE EVIDENCE EFFECTIVE? (IF NO, RISK IS
OBJECTIVE) TO SUPPORT CORRECT CONSIDER POTENTIAL IDENTIFIED IN
IMPLEMENTATION OF CARA) IRMM) APT? (Y/N)
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
RATIONALE FOR DESIGN RATIONALE FOR DESIGN DEFICIENCY? NATURE OF CONTROL DESCRIPTION OF
CONCLUSION IMPLEMENTATION (Y / N) DEFICIENCY DEFICIENCY? WALK-THROUGH
CONCLUSION APT RISK #? TEST
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
RATIONALE FOR DESIGN RATIONALE FOR DESIGN DEFICIENCY? NATURE OF CONTROL DESCRIPTION OF
CONCLUSION IMPLEMENTATION (Y / N) DEFICIENCY DEFICIENCY? WALK-THROUGH
CONCLUSION APT RISK #? TEST
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
CLIENT NAME
DOCUMENT NAME Walkthrough
BUSINESS CYCLE Expenses
PERIOD END
DOCUMENT #
Note: The table given below is for illustrative purposes. Audit Team may add/delete columns where required
1 Objective
To confirm our understanding, as per process note, of the flow of significant types of transactions
within significant processes including how these transactions are initiated, authorized, processed,
recorded and reported. In this working paper, we will evaluate the efficiency and effectiveness of the
control designs.
2 Work Done
Date of Discussion
Venue
M S K A / M S K C Representatives / Designations
Client Representatives / Designations
3 Basis of Selection
4 Transaction tested for Walkthrough
Understanding the Process Controls Identified
[Link] Description of Transaction
Step 1 - Step 1 - Step 1 - Step 1 - Name Name
Describe Describe Describe Describe Control 1 Control 2
1
This is CARA This is CARA /
/ not CARA not CARA
4 Conclusion
Conclusion to include the following:
Walkthrough was satisfactory / unsatisfactory
Walkthrough could be conducted for the complete process / could not be conducted for the entire process
Controls identified match with the identification as per Process Note / no / additional controls identified
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
Controls Identified
Name
Control 3
This is CARA /
not CARA
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
<Accounting Entries>
Sr. No. Description / Purpose of the Entry Account Code / Accounting Entry
Sub Code
Evaluation of the Accounting Policy
Accounting Policy as per the financial statements as on ___ (year end/period end) is as follows:
[Insert Accounting Policy here]
<Conclusion>
Based on the understanding of the Process, the accounting entries passed seem to be appropriate / inappropriate.
[In case inappropriate, suggest the changes required. Note down the same in the Query sheet, discuss with senior and then
with the client. Also, consider whether such changes will amount to changes in accounting policies and consequential impact
thereon.]
Based on the understanding of the Process and the Accounting, the Accounting Policy followed by the Company is appropriate /
inappropriate.
[In case inappropriate, suggest the changes required. Note down the same in the Query sheet, discuss with senior and then
with the client. Also, consider whether such changes will amount to changes in accounting policies and consequential impact
thereon.]
M S K A Associates/ M S K C Associates
V.1.2024
Chartered Accountants
