Substantive procedures

Substantive procedures

Responses to
assessed risk

vertise
Debtor days
increasing
Existence
no
Trade receivable recovery -

process vitution
-

Ageing is not -

r Action
updated -

timely
Sales is
recorded decuses cel Receivary
· Completeness based on the ExciEue
Existence sales order
Right
③ Ricis
Asselin

& recuation

& Decentartion El Diserpente

Completeness
S
Obtain list of debtors check mathematical accuracy
and trace total to financial statements

G
Compare current year list of debtors with prior year

D Obtain subsequent bank statement select on a sample basis, subsequent receipts and
trace it back to the general ledger / list of debtors

2) DEC Gustfu

Ze
e
-
Banksisiement
Ef
Th Fis MeSc

2025
-

3 Obtain a log of new customers on boarded for whom the credit limit is approved
during the year

5 Provide gdn / select gdn for sales booked near to the period end and inspect whether
the relevant receivable is appearing in the ledger or not
 Existence

Select a sample of debtors and circulate external confirmation

Make sure that it is addressed to appropriate party who is knowledgeable and

responsible for the related balance confirmation
TIP!
Adress is appropriate

Amount written is appropriate

I Above Testing Threshold 100 % MEANS

Significant
ONES

Long puisianDinh
2 The Corriains Crecific Risks
Related Party
NE PERieD End
Wit
Gels Beatrices

.
3 For Remining-Ransom Sampling

Confirmation control sheet

Name DrieSent Reminderdre Amount AsPER
Confirmation Difference
-
 No Response Response

Remingl

AGRief Exception

i
Timish Alinal
↑
Difference difference
no misifitment misriement
-

For unconfirmed balances

2 Obtain subsequent bank statement and check subsequent

clearance

2 For balances, those are not confirmed or partial cleared

perform invoice testing such as obtain invoices which
makes up the receivable balance and inspect the relevant
documents such as good dispatch note GDN
This will ensure existence and occurrence
Obtain ageing report and inspect long outstanding
balance and enquire about the relevant provisioning and
assess whether the appropriate provision has been
booked or not
Existence
acuence
 Mustipif
Fe
1256000
I
S
multiple Prices

Lase
-

Purchase

Ausisch

Raceeinh
Finte

2 Obtain Inventory report from a client check

mathematical accuracy and trace total to financial
statements

J Select a sample of items from the floor and trace it

back to the inventory report to check whether the
item is appearing in inventory report or not
If there are differences/item not appearing
We need to enquire why these items are not
appearing in inventory sheet
If management says these goods If management says that these goods have been sold and
pertains to some other entity, then we have been kept by the company then we need to verify the
need to verify the supporting sales order and the correspondence with the customer
documents such as correspondence/ evidencing the request
agreements
Enquire from client whether any inventory is kept with third-
party? if yes then ensure those items are appearing in the
inventory report by comparing reports sent by the third-party.

Existence
Observe inventory count and for the sample of a stock items perform
sheet to floor (also inspect inventory for quality)

For inventory kept with the third-party either visit for the
physical stock take or send direct confirmation

Consider involving Expert

Whether inventory is being

Valuation carried at lower of cost NIV

I Match the quantity appearing in the stock report used to calculate inventory
balance for the purpose of FS with stock report gathered at the time of
inventory count

2 For a sample of inventory items appearing in the stock report inspect

suppliers invoices or GRN

3 Recalculate the value of inventory by multiplying the quantity appearing in

the stock sheet with the price per unit

Y Obtain ageing of inventory and inspect for slow moving and long outstanding
inventory

5 Select the sample of inventory and check at which price it has

been sold after the year end to assess NRV

b Make sure that appropriate NRV loss has been booked against the damaged
stock identified during the stock take or against the slow moving, long
outstanding and the inventory that has been sold at a price lower than it cost
after the year end
 -

Existence
-
 Film Nam

comicon -

Orserve -

faie

Nice
250 450
F 1s

Aft
-

Obtain cash listing from the management for each location (if applicable)
check mathematical accuracy and trace total to financial statements

Observe cash count to check existence and valuation

For foreign currency, Trace exchange rate from the SBP site and multiply
following currency with the exchange rate as at the reporting date

Obtain acknowledgement of the person on the count sheet as an

evidence
Perform cut off by obtaining CPV before year end and after year end and check
whether they are recorded in the proper period or not
 Completeness
I Obtain list of bank accounts check mathematical accuracy and trace total to
financial statements /general ledger

2 Inspect minutes of board of directors to check whether there is any approval for
opening or closing the bank account
Compare current year list of bank account accounts with the last year list of
bank accounts
Existence

2 Circulate external confirmation to all the banks

Bank Account Bellished AspeeConfirmation Difference

HubL A 46506 465360- -

Aristo Reconciliat
I

NRP H
Spoopos 303700
Fr

2 Obtain bank reconciliation for each bank account

 Balance as per ledger 764680

Unpresented
Af : 19264 fas
za
10765
H
10766 3032-
3032

Uncleared

Balance as per bank statement 800

S
S

Check mathematical accuracy of the bank reconciliation statements by

adding up unpresented cheques and deducting unclear cheques

Obtain subsequent bank statements and trace

subsequent payments to ensure that unpresented cheques
are cleared

Subsequent credits in the bank statements to ensure that

uncleared checks are cleared
matcat
Barris stiemet
 Property plant and equipment

Captape Ladiopa CadieR

3

Building Office equipment Vehicles Total

Opening balance

Accumulated
depreciation

Cost
Opening balance

Addition
Disposal

Accumulated
depreciation
Opening balance

Depreciation
Reversal of
accumulated
depreciation due to
disposal
 I Obtain fixed asset register from the client check mathematical
accuracy and trace total to the financial statements

-
-
Ti E
Accumulated
Cost
-

TITER
-
- depreciation
Class Description Date Opening Addition Disposal Closing Opening Dep Disposal Closing

Building
Building
Lenovo March 1,
Equipment 2022
1022 Sum Sum
March 1,
Equipment HP 1025 2022
Equipment Dell 6051 July 1,
2024
Equipment July 1,
Dell 6051
2024
num
Equipment Dell 6051 July 1,
2024
Equipment Dell 6051 July 1,
2024
Vehicle

Vehicle

Vehicle

Vehicle

Vehicle

Vehicle
Vehicle

2 Select a sample of asset from the floor trace to the fixed asset register

Addition
3 Select a sample of additions and vouch them to supporting
documents such as purchase order, GRN and invoices

4 For selected sample inspect whether they physically exist or not

5 Ensure that they meet the capitalisation criteria as per IAS 16

# Inspect payment against asset from the bank statement

 Disposal

S Select a sample of assets, disposed and vouch them to supporting

documents such as transferred deeds and GDN

&
Re-calculate carrying amount of the assets disposed and make
sure that it is removed from the fixed asset register with
appropriate amounts

, Re-calculate gain or loss on disposal by comparing carrying amount with the

selling price

11
Inspect cash proceeds from the disposal of PPE from the bank statement

Depreciation

12
Compare the useful life of the assets with the companies in the industry

13 If there is any technological advancement consider whether the life revision is

required or not
14 Recalculate depreciation expense Using appropriate life or
depreciation rate
-
 Evaluate controls over
Impairment! preparation of impairment
working
Indicators
-

A Assess controls over the source

data that is being used to prepare
I Assets got damaged the value in use working

2 Continuous losses and Data regarding historical quantity sold is

declining sales generated by the sales team which is
approved by the head of sales (after
comparing the quantity used to
3 Rapid technological changes calculate sales) with historical financial
statements

Estimate about pricing is given by

commercial team/marketing team

Payroll cost is given by HR and Payroll

department which is approved by head
test of control of HR

2 Perform enquiry of the B The person preparing the value in

use working is competent and
relevant individual
capable

2 Inspect qualification
document of the Industry
individual preparing knowledge Qualification Experience
the value in use
working
3 Check precision of the VIU
working by comparing
historical projections with
the actual results

Y Inspect approval of relevant individuals

for the relevant data such as sales
quantity approval of head of sales.
revaluation of property plant and equipment
-
Obtain revaluation working / schedule from the client ENER management
evidencing
Class of asset Carrying Fair Surplus
asset description amount value /deficit

Ezeisman At
H

Fzuiemet Ax
If

Equipmen At Ax

Ensure that entire class has been revalued

Check mathematical accuracy and trace total to financial

statements

Inspect minutes of meeting of

D board of directors in which an
accounting policy has been Change in accounting
approved policies allowed when it
2 Obtain working of retrospective will result in more reliable
adjustment of an accounting policy and relevant information
from the management
WHER Wil
3
Evaluate whether the accounting
policy change has been Warris it's
WitEl
appropriately accounted for in vAus Str Enis
accordance with IFRS
Evaluate appropriateness of the disclosures made by the Bi Pied
management with respect to change an accounting policy Resistance .
 Assess competence, capability and objectivity of the
management expert
2 Check qualification of the management expert
TOWER 2 Inspect published reports of the management expert
leg 3 Perform enquiries of management expert
U Assess experience of the management expert in the
Rtie
relevant field
Titl wear steas- Alre
View Ripnermen
cos
Obtain management expert report mette
Income
METog
2 Assess reasonableness of the methodology
adopted by management Expert
2 Evaluate reasonableness of the assumptions used by
the management expert

3 Match amount appearing in the experts report with the

amounts appearing in the management working

Match fair value of the asset with recently conducted

transaction

Important! Consider appointing auditors own expert

Evaluate competence capability and objectivity
Agree the terms with the auditors Expert
Ensure that the data provided to auditors Expert is same that
is being provided to the management expert
Compare the fair value determined by the auditors expert with the
value determined by the management expert
For the differences make enquiries of the management
Arrange meeting of auditors Expert with the management
expert
Ensure that the surplus amount has been parked into the
reevaluation reserve account

Recalculate incremental depreciation on the revalued assets

Make sure that the disclosure is given in accordance with

IAS 16
Disclosure of HCA
Disclosure of forced sales value
Name of the valuer and the date of revaluation carried
-
 Impairment
Riese of

Nehr sosse Miste

-

Risse
x43 of
Peteiy
Co Now Not
Recorded
ComplianCit
undisclosed Grindincy

Lose Poralie
Enanse
X
Likely CASE H
-
Cities Accifesiy
- -
Itunes

Essence Record D -
-
se FK

WARA
Disclose v -
- He

Di
Hassan

Dissecte
 Gisecte IELSER

Carey te IEGst F

Easter
-
-

C
Da ↓
LisMein
MR A Tarte -

AppEt ?
.

Mr B +3 Cle
-

Fee
-

-
 Borrowings and loans
UBL

Company MCB

JS Bank
LEDGiet

100628 Loans
Scifuie
1506281 HBL fre

1006287 Mes -
SC I WIE
.

ab2e3 Iscari ↓X Schedule

At T

Sh

mas . Marle Einel

Outstanding Interest Repayment Closing

balance

isnt 2
,L

Accusey

31 8E 202

2 Obtain schedule of loans from the management check

mathematical accuracy and trace total to the financial
Completeness statements

2 Inspect BOD minutes to check whether there is any

approval for obtaining Finance
 Circulate bank confirmations to all the banks from
whom financing has been obtained
And ask to confirm the following:
Principal amount outstanding
Amount disbursed
Existence Amount repaid
Interest outstanding
Interest for the year
IAS 1 Collateral kept and charge created
2 Evaluate confirmation response and check whether
the amount confirmed by the bank is in line with the
amount appearing in the general ledger and the loan
schedules

Obtain loan agreement for facilities and inspect:

Valuation 1 loan amount - trace it to bank statement that

amount has been received

2 Interest rate

3 Repayment frequency

Y Collateral

5 Debt covenants

recalculate interest inspect repayment

based on the rate from the bank
statement
recalculate debt covenants to
ensure they are in compliance
 L make sure that current portion is presented
presentation in current and non current portion is
and presented in non current
disclosure
2 loan terms and are adequately
disclosed in the FS such as
1. Mortgages
2. Charges
 Accruals

Relevant Period epiest

Relevant Period Mein

Book
Hojaye

EtamPIES

sorely Accturte

② Rent Accounte

③ caryer's Fee

& Utility
EnEnse

2 Obtain detailed understanding of the entity and its operations

and make sure that in accordance with the operations all the
accruals have been booked

Pick Lew licensi Rezuitemen

Revenue 1 25 1
.
%
.
Arrival
Fee

Forre Pays Commision to Its

Francisfe Raced en saree

2 Compare current year accrual with the prior accrual

3 Select a sample of accrual and inspect subsequent actual

invoices
4
Obtain working of accrual and re-calculate the amount to ensure
whether the accrual made appropriate or not
 ,
Convinces Geinh Congr
lich
DiscesRecord ?

Neurose

Fr-cis
 21 DEC Brie is
Inter Non
Afief
Pass 202u Afte In <
.

Mi

End Event

Only Disclosure
Reze :Ef
 D Competences
Audit to procedures on revenue accuserie

Acutey
NashE Guilter of
-F
Entity ? SAF
Me , Tille

Performance
Obligation offet
Eftmpt: AirAs 12m
Ci Iom
SAR
HorifA Amst
carference S 57 .
Sirevice Transaction

Conister 2m Price
1 .
43
:13
14m

AirAs Hong A

Cates Report T
Nusice

most
-

Dare
-
Enziy ice
-
Potassresva
-

Gon
Pittli 1024 Suns com
-

1376 Mathematical

1077 Accusery
samp

>
Si , 2 ,
-

# pict

Obtain sales report from the management check

mathematic accuracy and trace total to the financial
statements/general ledger
Check whether there is any missing invoice in the
sequence and make sure that missing invoice is
cancelled
Pier Random Can el iltecit
is sale Rest
crioff iestial .
 Select a sample of sales transactions appearing in the
GL/sales report

Obtain contract for the selected sample and inspect

contract for the purpose of identification of
performance obligations and transaction price

Make sure that the transaction price is allocated to

different performance obligation based on standalone
market prices

Make sure that the revenue is recorded for each

performance obligation when performance obligation
is satisfied/settled by inspecting goods dispatch note
or service delivery note

For long term construction

contracts
Make sure that the revenue/sales is recorded
based on the stage of completion

FFRS 15 ASSET CONSTRUCT

D
Premises
~
Sulieme
Compute
Orte At

Price ?
Contester
Pres CONTROlEd By uniomet

soc ? Cite of Completion Rivene over The Peried

-

OVERAL MEA1
cost isfeil ? End of Yet
-

Tire Losi? ConiRaciPrice Vom <

CATES 125
Cast ie
(200m) 55m 85%
come/i/
cost Total
=
EstimAf Sat=

-deem
Gom Profic
im
 Inspect overall sales amount from the contract

Obtain estimate of the total cost from the management and

assess its reasonableness by:

1. Comparing with the other projects completed recently

on the previous years.
2. Inspecting subsequent actual expenditures.
3. Assessing elements of the cost such as labour,
overheads and material
4. Consider appointing Expert for the purpose of
assessing these reasonableness of the cost
5. Compare historical estimates of the management with
the actual to check precision

Inrenty/Corrichtei
Cos :
A

For cost to date Crit F

Select a sample of cost incurred to date and vouch

Cost is
them to supporting documents such as:
DATE 1. Labour cost paid.
2. Material cost incurred by inspecting goods
Label
n -

issuance notes/purchase invoices

A
3. assess the reasonableness of the overheads by
Some H assessing its nature to conclude that they are
#
directly attributable or not.
Maitt 4. assess the reasonableness of the allocation
mechanism for example, electricity /depreciation
-

As
samic
#X

8 If -
is apportioned on the basis of hours worked
& EDF fo As Sample walluse Convinces .
-
A

Electricity At
rent wen
-
Ger = H
-
-
The calculate the stage of completion by dividing cost to
date with total estimated cost of the contract

Multiply a stage of completion percentage with the total

revenue to check the amount of revenue to be booked and
trace it to the sales report

146 . 25-
Ric -

↓ SAIES 175 Transaction

-

Garl
SAIFS TAX
21 25.

TAt
Payt

Companies Presentation
-

Alt:

Glass SALES
146 25
.

CATE Tax (2 : 25)

TRADF Sico und Ittt)

-25
 -
liniet Suppliel
MatATicAl Accessity
Thesite
is alie.

Multip !
Supplie
-

-
Current Yets lic:
Ke

Price Yinte list Sie

Compar ?

- driain Sucshment
Basic sirisment
- & Cielect A

Lami Ransom Paymen

N
?
Confirmatio E iste in

-
Baei ja

Supplier/isl
ISL .

~
Select Samdi
Supplies
of

siriement
& Maical in

Rice zen
Wit The Bil
AppAline En

Gestance. as I supplied
1 :s . ind
Obtain list of supplier account payable listing, check
mathematical Accuracy and trace total to FS.

Obtain subsequent bank statement and inspect subsequent

payments and trace it back to GL

Select sample of GRN near period and trace it

back Invoice details appearing in supplier
subsidiary ledger

Compare current year suppliers with last year

suppliers and inspect for usual suppliers

Select a sample of suppliers statements trace it

back to the general ledger

Circulate external confirmation to

sample of suppliers
 -

Gestef
-

B
③
Invoice TehinL
 ~
FX:STENGE
-

Bis amount Payment

LEDGif
Supporting
-
Document
-
-

-
-
-

-
 We will evaluate portfolio movement to Fritough
·
assess SPPI test
Sites
Ezuif Fr it
ough
PER
securities
-

J I

DEBT
Dickin in De

Securities-Band
-FC

Amost Fr Fr

· il
↑

inspect Minutes of
meeting of board of
directors

Populate
G -

m
Investment Registel F

D
Conte

de
Stee
-

Price
Cecilitylymse seein que main openC
teir
-

D
-
Daiich
-

Pe Enhl
4 X

A
Hal
our
Fox
dr
-
mu ~
Per As e E

As
 DEBT Securities

Picc Cukule K-EIEl-Ric

go In Ge L op Cre

derzog Zine
e Fo

Inspect minutes of the meeting of board of directors to check

approval of any investments
S
S
Substantive procedure on income taxes

I Obtain calculation of current tax from the management

S

2 Match profit before tax from the financial statements

3 Make sure that adjustments in profit before tax are made as per
income tax ordinance 2001

4
Check mathematical accuracy of adjustments to arrive at taxable
income

5
Verify tax rate from income tax ordinance 2001

6 Re-calculate current tax expense by applying tax rate on taxable

income

7 Check whether deferred tax has been appropriately booked on

all temporary differences

-
Profit BeforeAt th AsPerFirs

As PER

Astriment ToGool Es TRACE

Die Aljuriment Hex)
Provision Baldert U Dil DiA

Hx
Dis Ale WES Ea
-

Taxas'
Income

Blonde
IfAt less
Selerate
DTA
P
Is allowed to be recognised to the extent it is
probable that entity will generate future taxable
profits
 Fre
Tree D Risin

iat Det wecting

El

Ensete
Inspect Figfoo That That Rates
it le
Whether itis Exempt Mes
? Anes
Three
=>
match Es
It

We will Alses Ressemalcnses

lossEs
fit on
of at
the
Fun/e
arierning Protections of
by
the Company El AssEs
Reassnadiense of
The Assumptions
 lopuriis
5%
FFRsi5- CAF
y 5
Fireymorris
Reinsor :
Ii Che

Los
202s
Reusa Record
sent ,-,
RE X
Reinen 750 500 Estima

up : Filmi Cit flo loskif5

Sales 1665515x of5

,

Inspir Coniraet brichter

85 5X175
is assece Reinse lits

Penci of
 Intangirie Register wil
Register
Case
~
Frederie
Sofiware
Entangichif
Biltrf
ACLuitEf Goodwi Erieriting
Gerricht
-

Rus :
Ness Resealed Serve
Combination EXEnse CaliAlse
Final Fe Deci
D state Pascades Alserman Fitsiciciiy
Intention
Binder The Sadlyage

E
Freentity The Ho, sing. ③ Resourcin
E lite Conciliation & Abiling
& priain Catest Es of Alquidee is
in mi od

si
5 Eclect book value of
Losin
Asses
Resid y
& Olitin Fotie Valuation Report from Misen/C
The management In
try Apply
-

① Conside Appointing Don

-

Ent

⑤ Recalculaic Er of Net Assis

Compete fr of wei resive with Consisten

Recalculatio Geogr ....

Substantive procedure on intangibles

Obtain intangible register/schedule check mathematical

accuracy and trace total to financial statements

Inspect BOD minutes to check whether there is any

authorisation for acquisition or internally developing
intangible

Select a sample of acquired intangibles and vouch them to

supporting documents

For internally generated intangibles— obtain a

breakup of expenditures and assess which
expenditures pertains to research phase and which
expenditures pertain to development phase

Obtain management plan to assess technical feasibility and

-

BOD minutes to assess intention of the company

Make sure that the capitalisation has been done after the
fulfilment of conditions (when project become commercially
viable)

Select a sample of expenditures and vouch them to

-

supporting documents such as supplier invoices

 Authorize
Girl
Share capital
Pursu -

Contritt Annet
-

Obtain legal document form A regulatory return from

management and inspect authorised and paid up capital

For further issue, if any inspect BOD minutes to check

authorisation for issue

Inspect bank statement to check proceeds against issuance of

shares
 Alre
Inspect lenae somme

orzelnelatena
Recticuailadel
Proces

Relecom Gain 10ss

Ekuiss-mansemen
Confirmation C
&Farte
1:13
.

IiiNA
Howa Citing ?

-
herimete Reinsu
-
 -

-
-

-
-

Management giving Shareholder with good financial

guarantee for going viability giving guarantee
concern

Performed floor to Performed sheet to

sheet for existence floor for existence

Verifying purchase
price of inventory
from supplier invoice
for NRV testing
 2
-

2 If
write off

EJuriy
wilfoff

Workoff 1 23.

Enibilit I .

La

Equity
boom NECATive

GrEneris
Bleach .
 Este Riedi Normal Elecificity
EXESEL -reachtric
Campi .
Ross Envoices
-

recent

Entert

Ahin L
landswistAnDink
GassezuetRecovery
Correspondine .

Gami wal Tritin Extensi

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-

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veuet Them is Superstirt ihtessite is

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NAM
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Winter
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Existnl
2023
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Later Monit
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sery
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 2 DEC Obligating Ppeverfication
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V