AUDIT PROGRAM FOR PROPERTY, PLANT AND EQUIPMENT

LGU: ____________________ Prepared: _______________ Date: ___________

Audit Period: ____________________ Reviewed: _______________ Date: ___________

Criteria/Applicable Laws, Annual and Supplemental Budgets, R.A. 9184 and its IRR
Rules and Regulations COA Cir. 92-386, NGAS for LGUs, COA Circular 2012-001

Audit Risks:

1. All acquired/purchased PPE may not be complete as to supporting documents, accurately

recorded in the books of accounts and conform with the pertinent rules and regulations.
2. All disposal of properties may not be properly appraised, authorized and properly
recorded in the books.
3. The recorded PPE in the books may not be existing.
4. The amount of PPE recorded in the books may not be properly valued/measured.

Audit Assertions
R
Audit Objectives E/ P&
C & V Comp
O D
O
1. To determine whether all acquisition of PPE are
complete as to supporting documents, accurately
recorded in the books of accounts and conform √ √ √
with pertinent rules and regulations.
2. To determine whether disposal of properties are
authorized and properly recorded in the books.
i. To achieve uniformity and consistency in
the conduct of appraisal of government
property for disposal;
ii. To promote facility in the computation of
appraised values;
iii. To attain more realistic valuations of √ √ √
property under disposal based on the
actual state or condition of properties
being disposed of; and
iv. To provide reliable basis of ensuring that
government recovers a fair return from the
disposal of its properties.
3. To verify existence of property, plant and
√
equipment recorded in the books.
4. To determine whether PPE are properly valued.
√
Objective No. 1 To determine whether all acquisition of PPE are complete
as to supporting documents, accurately recorded in the
books of accounts and conform with pertinent rules and
regulations.

Audit Procedures to Consider:

Assertions W/P Assigned Man Prepared Reviewed

Audit Procedures
Addressed Ref. to days by by
1.1 Trace the FS balance to the
TB down to the general C, D,
ledger and schedules. Comp
1.2 Check the schedule against
the subsidiary ledger.
1.3 Verify the posting from
registries to JEV, from JEV
to General Journal and
General Journal to TB.
1.4 Check the footings of the
GL, SL and schedules.
1.5 Examine the JEV/DV and
supporting documents for:
 regularity and validity
 approval and
authorization
 accuracy of computation
 correctness of
accounting entries
1.6 For debit entries, check
valuation of property.
 If through donation, see
to it that it is stated at its
appraisal value.
 If through purchase,
acquisition cost.
1.7 Document results of the audit
working paper and take note
of the deficiencies.
1.8 Prepare draft of AOM for
review of ATL (if done by
ATM) or by SA (if done by
ATL).
1.9 Discuss with management
the audit issue.
 Assertions W/P Assigned Man Prepared Reviewed
Audit Procedures
Addressed Ref. to days by by
1.10 Finalize AOM and issue
to management.

Objective No. 2 To determine whether disposal of properties are

authorized and properly recorded in the books.

i. To achieve uniformity and consistency in the

conduct of appraisal of government property for
disposal;
ii. To promote facility in the computation of appraised
values;
iii. To attain more realistic valuations of property
under disposal based on the actual state or
condition of properties being disposed of; and
iv. To provide reliable basis of ensuring that
government recovers a fair return from the disposal
of its properties.

Audit Procedures to Consider:

Assertions W/P Assigned Man Prepared Reviewed

Audit Procedures
Addressed Ref. to days by by
2.1 Examine the entries in the
general ledger, if there are
credit entries, determine the
reasons.
2.2 In the event that the decrease
was through transfer to other
government agencies or other
private organization without
cost, secure a SB/SP
resolution authorizing the
transfer pursuant to Section
381 of RA 7160.
2.3 If the properties were
disposed thru destruction or
sale, determine whether the
disposals were authorized by
the auditor as required under
Section 379 of RA 7160.
2.4 Verify the journal entries
made for the disposal, which
should be as follows:
 Assertions W/P Assigned Man Prepared Reviewed
Audit Procedures
Addressed Ref. to days by by
For Donations:
Donation (878) xx
Accumulated Dep. xx
PPE(Appropriate Account) xx

For Destruction:
Loss of Assets (961) xx
Accumulated Dep. xx
PPE (Appropriate Account) xx

For Sale: (At a gain – Cash received is more than the book value)
Cash in Vault xx
Accumulated Dep. xx
PPE (Appropriate Account) xx
Gain/Loss on Sale of Disposed Assets (692) xx

For Sale: (At a loss – Cash received is less than the book value)
Cash in Vault xx
Accumulated Dep. xx
Gain/Loss on Sale of Disposed Assets (692) xx
PPE (Appropriate Account) xx

2.5 Document the results of the

audit working paper and take
note of deficiencies.
2.6 Prepare draft of AOM for
review of ATL (if done by
ATM) or by SA (if done by
ATL).
2.7 Discuss with management
the audit issue.
2.8 Finalize AOM and issue to
management.
2.9 Secure the Report of Physical
Count of Property, Plant and
Equipment.
2.10 Conduct ocular
inspection.
2.11 Conduct physical count
on a selective basis to test
accuracy of records.
 Assertions W/P Assigned Man Prepared Reviewed
Audit Procedures
Addressed Ref. to days by by
2.12 Identify equipment which
are damaged, obsolete and
unserviceable and investigate
action taken to drop them
from the books of accounts.
2.13 Document results of the
audit working paper and take
note of deficiencies.
2.14 Prepare draft of AOM for
review of ATL (if done by
ATM) or by SA (if done by
ATL).
2.15 Discuss with
management the audit issue.
2.16 Finalize AOM and issue
to management.

Objective No. 3 To verify existence of property, plant and equipment

recorded in the books.

Audit Procedures to Consider:

Assertions W/P Assigned Man Prepared Reviewed

Audit Procedures
Addressed Ref. to days by by
3.1 Secure the Report of Physical
Count of Property, Plant and C
Equipment.
3.2 (Conduct ocular inspection.)
3.3 Conduct physical count on a
selective basis to test
accuracy of records.
3.4 Identify equipment which are
damaged, obsolete and
unserviceable and investigate
action taken to drop them
from the books of accounts.
3.5 Document results of the audit
working paper and take note
of deficiencies.
3.6 Prepare draft of AOM for
review of ATL (if done by
ATM) or by SA (if done by
ATL).Issue NS or ND if
warranted.
 Assertions W/P Assigned Man Prepared Reviewed
Audit Procedures
Addressed Ref. to days by by
3.7 Discuss with management
the audit issue.
3.8 Finalize AOM and issue to
management.

Objective No. 4 To determine whether PPE are properly valued.

Audit Procedures to Consider:

Assertions W/P Assigned Man Prepared Reviewed

Audit Procedures
Addressed Ref. to days by by
4.1 Verify whether the
depreciation were computed C
monthly as required in the
NGAS Manual.
4.2 Verify whether fully
depreciated and obsolete PPE
were transferred or reclassified
into Other Assets account.
4.3 Verify whether the major
repairs was capitalized by tracing
the disbursement voucher/s
relative to the repairs of PPE;
and determine whether the
expenses incurred were material
and would prolong the life
expectancy of the property.
4.4 Document results of the audit
working paper and take note of
deficiencies.

4.5 Prepare draft of AOM for

review of ATL (if done by
ATM) or by SA (if done by
ATL).
4.6 Discuss with management
the audit issue.
4.7 Finalize AOM and issue to
management.