TERMS OF REFERENCE – COUNTRY ANNUAL AUDIT

Evidence Action seeks to engage the services of a professional audit firm to conduct an external audit for the period of 1st October 2024 to 31st December 2025 with a renewable contract based on performance in Cameroon.

Scope of Work

The auditor’s role will be to provide the professional services set out below ('the Services"). Below are the detailed procedures that we will carry out.

General procedures

I.             Obtaining the trial balance and determining whether it agrees with the general ledger and the financial statements.

II.             Consider the results of previous audits and review engagements, including accounting adjustments required.

III.             Inquiring whether there have been any significant changes in the entity from the previous year (e.g., changes in ownership or changes in capital structure).

IV.             Inquiring about the accounting policies and considering whether:

a)   They comply with local and international standards;

b)  They have been applied appropriately; and

c)   They have been applied consistently and, if not, consider whether disclosure has been made of any changes in the accounting policies.

V.             Reading the minutes of meetings of the board of directors and other appropriate committees in order to identify matters that could be important to the review.

VI.             Inquire if actions taken at board of directors or comparable meetings that affect the financial statements have been appropriately reflected therein.

VII.            Inquire about the existence of transactions with related parties, how such transactions have been accounted for and whether related parties have been properly disclosed.

VIII.            Compare the results shown in the current period financial statements with those shown in financial statements for comparable prior periods and, if available, with budgets and forecasts.

IX.            Obtain explanations from management for any unusual fluctuations or inconsistencies in the financial statements.

X.            Consider the effect of any unadjusted errors – individually and in aggregate.

XI.            Bring the errors to the attention of management and determine how the unadjusted errors will influence the report on the review.

Cash and Cash Equivalents:

I.             Obtaining the bank reconciliations and inquiring about any old or unusual reconciling items with client personnel.

II.             Inquiring about transfers between cash accounts for the period before and after the review date.

III.             Agreeing the cash book balance per the reconciliation to the control account in the general ledger and the cash book;

IV.             Tracing all entries in the cash book for a given period.

V.             Mobile money reconciliation.

Receivables

I.             Inquiring about the accounting policies for initially recording receivables.

II.             Agreeing grant incomes figures reported in management accounts/financial statements to trial balance

III.             Obtaining a schedule of receivables and determine whether the total agrees with the trial balance.

IV.             Obtaining and consider explanations of significant variations in account balances from previous periods or from those anticipated.

V.             Reviewing the aging analysis of the receivables. Inquiring about the reason for unusually large accounts, credit balances on accounts or any other unusual balances and collectability of receivables.

VI.             Discussing with management the classification of receivables, including noncurrent balances, net credit balances and amounts due from staff and other related parties in the financial statements.

Inventories

I.             Reviewing balances of stocks reported in management accounts/financial statements are accurate and valid;

II.             Ensuring completeness of stock balances reported in the books of account;

III.             Ensuring Stock transactions are properly analyzed and posted in the nominal ledger.

IV.             Reviewing stock adjustments made resulting from the last physical inventory count.

V.             Reviewing the basis used in valuing each category of the inventory

VI.             Compare inventory turnover with that in previous periods.

VII.            Agreeing stock balances per valuation sheets for ALL categories of stocks and comparing this with stock balances reported in management accounts/financial statements

Intercompany Balances (if applicable)

I.             Using the aged listing and control ledger, obtain trading balances for related parties (Evidence Action countries). Ensure that balances are reconciled monthly prior to closure for management accounts. Where there are differences, ensure reconciliations are done, reviewed for validity and that balances are followed up for subsequent clearance;

II.             Ensure inter-countries balances are signed off

Fixed assets

I.             Agreeing figures reported in management accounts/ financial statements to trial balance. Any variances will be discussed with Finance Manager/

II.             Ensuring assets summary schedule of property agrees to the detailed fixed assets register (FAR).

III.             Agreeing individual assets balances as per general ledger (GL) with detailed fixed assets register (FAR) balances.

IV.             Confirming the depreciation method and rates used are per fixed assets policy and re- calculate the depreciation amount to ensure that correct rates and useful life have been used.

V.             Ensuring that recorded fixed assets are correctly classified as capital assets and expenses (incidental costs) that should be capitalized are recorded as part of the fixed assets.