External Auditor

Description:

The Auditor should perform the audit in accordance with the procedures described below,
which cover documentation and evidence, planning, fieldwork, and reporting. The Auditor
should exercise due professional care and judgment and determine the nature, timing, and
extent of audit procedures to fit the objectives, scope and context of the audit.
(1) Planning
(a) Preparation of the Audit, Planning Activities
The Auditor must prepare the audit so that it is performed in an effective and efficient
manner and agree on timing for carrying out the audit, notably with regard to fieldwork. The
Auditor will then also confirm with the Entity the locations(s) and ensure that relevant
supporting documents as well as key staff will be available during the audit. Adequate
planning involves that appropriate attention is devoted to important areas of the audit, that
potential problems are identified and resolved on a timely basis and that the audit is properly
organised and managed in order to be performed in an effective and efficient manner.
The Auditor should have an audit plan documenting the audit approach and key principles of
planning, fieldwork, and reporting.
(b) Preparatory Meeting with the Entity
The Entity foresees a preparatory meeting with Auditor which will be held by conference call
or in person. The purpose of this meeting is to discuss the planning, fieldwork and reporting of
the audit and to clarify outstanding issues. During the preparatory meeting, the Auditor may
request additional information and documents that he/she/it considers necessary or useful for
the planning and fieldwork of the audit.
(2) Fieldwork
The fieldwork shall commence as soon as possible and not later than 5 calendar days after the
signature of the Service Contract. The main task during the fieldwork will be to perform
substantive tests. Key information about the testing process must be provided in the Audit
report (Annex 2 Appendix 3 to Annex 2). The Auditor shall also pay attention to section VI
paragraph 5 of these terms while conducting the Audit.
(3) Draft Report and Closing Meeting
At the end of the fieldwork, the auditor shall create the draft report and organize a closing
meeting with the Entity in order to discuss the findings, obtain its initial comments and agree
on additional information to be provided.
(4) Audit Documentation and Evidence
The Auditor shall prepare audit documentation and obtain sufficient appropriate audit
evidence to support audit findings and to draw reasonable conclusions on which to base the
audit opinion. The Auditor shall use professional judgment to determine whether audit
evidence is sufficient and appropriate taking into account the Contractual Conditions.
(5) Audit Report and Management Letter
The auditor is expected to present an audit report and a Management Letter. The Auditor
should submit to the Entity one portable document format (PDF) copy and three (3) original
copies of the Audit Report in English for the ADRA International (Coordinating Office) funded
project. The Entity will forward the original report to ADRA International for processing.
b) Conduct of the Audit

In conducting the Audit, the Auditor shall:
(1) Carry out tests of transactions as are necessary, in order to obtain an understanding of
the accounting system, to assess its adequacy as a basis for the preparation of the financial
statements and to establish whether adequate records have been maintained as required by
ADRA International regulations and/or financial rules of the EM22-104.
(2) Conduct an in-depth review of the internal control systems to have sufficient
knowledge of the procedures underpinning the systems
(3) Confirm that funds have been used in accordance with the applicable rules of the
EM22-104 and that they have only been used for the purposes for which they were intended
for and in accordance with the conditions under which the funding was provided
(4) Confirm that Goods and services financed have been procured in accordance with
sound procurement procedures set out in the EM23-007 procurement guidelines and ADRA
International Procurement Policy
(5) Verify
(a) that the expenditure verification is in line with the EM23-007 Grant Agreement and
Project Implementation Contract (including all Annexes thereto).
(b) that it is evident from the bookkeeping records and from the audit of accounts that the
expenditures are covered by the revenues, and it must thus be verified that there is no
duplicate financing by external funding bodies.
(c) that transactions are supported by reliable invoices and receipts and supporting
documents.
(d) the eligibility of expenses given the starting date of the monetary expenditure.
(e) that transactions have been reviewed and authorized by appointed personnel.
(f) that all expenses are recorded in the Entity’s accounts and are backed by originals of
supporting evidence
 to audit the proper bookkeeping,
 to audit the accounts on the basis of original vouchers,
 to cancel the original vouchers,
 to audit the plausibility of expenditures,
 to assign expenditures to the items in the cost schedule
 to audit the overall conduct of business.
(g) that financial transfers (bank, cash) are understandable and in line with the reported
expenditures.
(h) that where special accounts have been used, they have been maintained in accordance
with the provisions of the relevant EM23-007 and ADRA International Agreement/Project
Implementation Contract.

(i) that each set of accounts contains a clear description of cash flows that is documented
in the form of currency exchange confirmations and bank statements.
(j) that if any interests have been generated in the Entity account.
(k) that the awarding of sub-contracts for delivery and supplies, work and services is in
compliance with the relevant procurement procedures stablished by the donor.
(l) that purchased goods are listed correct in the inventory list.

3. The Auditor will report to ADRA International any attempt by the Entity to restrict the
scope of the Audit, or any lack of cooperation on the part of the Entity. The Auditor will
consult ADRA International on what action may be required, whether or how the Audit can
be continued and whether changes in the Audit scope or the timetable are acceptable.