Financial obligations represent the value of the obligations acquired by the company by obtaining resources from credit institutions or other financial institutions or other entities different from the above, from the country or abroad.
Financial obligations are all those responsibilities that the company acquires with financial credit entities such as banks and corporations to finance itself in the short term. The auditor must set the audit program to validate the information that the company has provided, with respect to this important area, developing the points described below:
1. Review and evaluate the strength and / or weaknesses of the Internal Control system and based on said evaluation:
- Carry out compliance tests and determine the extent and timing of the applicable audit procedures according to the circumstances Prepare a memorandum or report with the result of the work, the conclusions reached and the comments on the strength and / or weaknesses of the control internal, requiring immediate action or may be appropriate points for the recommendation letter.
2. Plan and carry out substantive tests of the figures shown in the financial statements and that are necessary according to the circumstances.
Audit analysis
The financial auditor must perform the mathematical calculations necessary for the evaluation of the correct application of the NAGA
Compliance testing
1. Review the supporting documents for financial obligations.
2. Verify the existence of an advisory committee or pool that evaluates the need for financing and determines the best option to take.
3. Determine the accuracy of the accounting records for the accounts in this group.
4. Study the suitability of the institutions with which financial obligations have been agreed.
5. Verify the existence and application of function manuals for the people involved in the handling of financial obligations.
6. Verify the existence and application of procedure manuals that indicate the regular channel that a financing request must follow before a financial institution or other entity.
7. Rectify the calculations corresponding to interest and amortizations that may be applicable.
For the correct evaluation of financial obligations, the auditor must have clear knowledge of the provisions issued by the entities that have oversight of credit companies
Substantive tests
1. Obtain the reconciliation of the list of loans with the highest and balances for:
- Verify mathematical accuracy Compare amounts with appropriate supporting documentation Investigate significant or unusual reconciliation items.
2. Obtain the list of loans for:
- Verify mathematical accuracy Compare selected items with loan agreements Investigate significant or unusual items Verify translation of foreign currency transactions
3. For a sample of new loans:
- Compare with loan listing Compare details with loan agreements Verify mathematical accuracy Compare with receipts or other supporting documentation, taking into account premiums, discounts and issuance costs For issuance costs compare details with the supporting documentation and confirm with third parties.
4. For cancellations of loans made:
- Compare to loan listing Compare payment amounts and dates with loan agreements Compare disbursements or other supporting documentation Verify mathematical accuracy
5. Confirm directly with the lenders the details of the loans in force during the period and at the end of the same, including the compensatory balance agreements, future maturities, guarantees, compliance with clauses and other characteristics of the loans.
6. Review of the minutes of the board of directors or other meetings of the financial committee where new loans and payments are approved and compare them with the real ones.
7. Obtain evidence of compliance with restrictive clauses.
If in conducting the examination the auditor finds principles that are being violated or some irregularities, he must state in his report the nature of these and give the necessary control tools for immediate review.
