Rizwan & Co.

Completed by Reviewed by Reviewed by Schedule

Chartered Accountants (SPS/AM) (Partner)

CLIENT : Shopistan (Private) Limited

ACCOUNTING PERIOD : June 30, 2020 Date : Date :
AUDIT PROGRAMME OF : TANGIBLE FIXED ASSETS

INITIAL CONCLUSION
REVIEW S= Satisfactory STAFF
ASSERTION TEST TEST DESCRIPTION BY N= Non-satisfactory SCHEDULE INITIAL/
S or FWQ GRADE
Dt: N Reference
C E A V
A TEST OF CONTROLS

1 Examine fixed asset register and review

procedure for periodical checking of physical
existence of fixed assets.

2 Check that fixed asset register is agreed with

nominal ledger periodically.

3. Check compliance with procedures for authorize-

ation capital expenditure and disposal of fixed
assets.

4 Check to ensure that all documents of title are

held in a secure place with proper control over
removal and replacement of documents.

5 Check compliance of custody controls in the

context of movement of fixed assets.

6 Check that periodic (at least annual )appraisal

insurance cover, is carried out.

7 Check the physical safeguards exist against

theft or misappropriation of assets.

8 Review results of test of controls performed

with regard to purchases of assets on credit and
cash and sale of fixed assets.

9 Has the capitalisation of borrowing costs ceased

when substantially all the activities necessary
to prepare the qualifying asset for its intended
use or sale are complete ?

Tangible.XLS Page 1 of 8
 Rizwan & Co. Completed by Reviewed by Reviewed by Schedule
Chartered Accountants (SPS/AM) (Partner)

CLIENT : Shopistan (Private) Limited

ACCOUNTING PERIOD : June 30, 2020 Date : Date :
AUDIT PROGRAMME OF : TANGIBLE FIXED ASSETS

INITIAL CONCLUSION
REVIEW S= Satisfactory STAFF
ASSERTION TEST TEST DESCRIPTION BY N= Non-satisfactory SCHEDULE INITIAL/
S or FWQ GRADE
Dt: N Reference
C E A V
10 Has the exchange risk cover fee relative to the
foreign currency borrowing out of proceeds of
which assets were acquired been capitalised
after commencement of commercial production ?

B SUBSTANTIVE ANALYTICAL PROCEDURES

1 Obtain schedule of fixed assets and check any

unusual variance between current year, prior
year and budgeted amounts for:
a. additions by class of assets.
b. disposals by class of assets.
c. depreciation charges.

2 Compare depreciation charges for reasonable-

ness with recorded tangible fixed assets
amount in total or by separate class of assets.

3 Test depreciation charge by multiplying

recorded amount for each class of assets by
average depreciation rate used by the entity
for the relevant class

4 Review and compare the ratio of maintenance

and repairs with previous year and budget to:
a Cost of tangible fixed asset
b revenues
c total expenses.

5 Compare capital work-in-process balance with

budgets for reasonableness.

6 Compare charges in production output to addi-

tions of plant and machinery.

7 Check to ensure that increase in production

capacity is evidenced by increase in production.

Tangible.XLS Page 2 of 8
 Rizwan & Co. Completed by Reviewed by Reviewed by Schedule
Chartered Accountants (SPS/AM) (Partner)

CLIENT : Shopistan (Private) Limited

ACCOUNTING PERIOD : June 30, 2020 Date : Date :
AUDIT PROGRAMME OF : TANGIBLE FIXED ASSETS

INITIAL CONCLUSION
REVIEW S= Satisfactory STAFF
ASSERTION TEST TEST DESCRIPTION BY N= Non-satisfactory SCHEDULE INITIAL/
S or FWQ GRADE
Dt: N Reference
C E A V
C OTHER SUBSTANTIVE PROCEDURES

1 Obtain schedule of fixed assets and

a. check opening balances with prior year files
b. check arithmetic accuracy
c. trace selected sub-total to general ledger
d. prior year capital commitments

2 Check to ensure that policies for capitalization

and depreciation are applied consistently and
are in accordance with IAS.

3 Select a sample of addition during the year

and check
a. that assets physically existed as at balance
sheet date.
b. details with invoices and G.R.N.
c. check casting of invoices and L/C records
d. entry in fixed asset register and general
ledger
e. classification is correct
f. approval of Board of Directors/authorized
person
g. agreement if any
h. title documents
i. payment are in accordance with contract

4 Select sample of addition to CWIP and ensure

the amount billed are in accordance with stage of
completion of work as certified by Architect/Engi-
neers.

5 Select a sample of disposal during the year

and check

a receipt vouchers, supporting documents,

cash book and bank statements

Tangible.XLS Page 3 of 8
 Rizwan & Co. Completed by Reviewed by Reviewed by Schedule
Chartered Accountants (SPS/AM) (Partner)

CLIENT : Shopistan (Private) Limited

ACCOUNTING PERIOD : June 30, 2020 Date : Date :
AUDIT PROGRAMME OF : TANGIBLE FIXED ASSETS

INITIAL CONCLUSION
REVIEW S= Satisfactory STAFF
ASSERTION TEST TEST DESCRIPTION BY N= Non-satisfactory SCHEDULE INITIAL/
S or FWQ GRADE
Dt: N Reference
C E A V
b entry in fixed assets register and general
register
c approval of Board of Directors/authorization
d calculation of gain or loss on disposal
e posting of gain or loss to general ledger
f comparative market prices where available.
g if applicable ensure proper adjustments is
made to revaluation surplus

6 For sample of leased assets capitalized during

the period:

a agree details to lease agreement

b confirm details with lessor
c check arithmetic accuracy
d check treatment of finance lease, is in
accordance with IAS
e check asset is capitalized at lower of market
value or discounted value of minimum lease
payments

7 Check that residual amounts of assets subject to

finance lease are transferred on completion of
lease to own assets

8 Check assets acquired on completion of operating

lease are capitalized at deposit value.

9 Check that operating leases have been

appropriately classified and are not finance leases

10 Reconcile previous year capital commitments

with current year additions and future expenditure
program.

Tangible.XLS Page 4 of 8
 Rizwan & Co. Completed by Reviewed by Reviewed by Schedule
Chartered Accountants (SPS/AM) (Partner)

CLIENT : Shopistan (Private) Limited

ACCOUNTING PERIOD : June 30, 2020 Date : Date :
AUDIT PROGRAMME OF : TANGIBLE FIXED ASSETS

INITIAL CONCLUSION
REVIEW S= Satisfactory STAFF
ASSERTION TEST TEST DESCRIPTION BY N= Non-satisfactory SCHEDULE INITIAL/
S or FWQ GRADE
Dt: N Reference
C E A V
11 Obtain list of capital commitments at the
balance sheet date showing

a commitment authorized but not contracted

b commitments contracted for

12 Obtain analysis of repair and maintenance

expenses account and for a sample of material
items check to ensure that items of capital
expenditure are not included.

13(a) Check depreciation charge for the year with

a rates of depreciation which are consistent

and appropriate
b entry in fixed assets register and general
ledger
c arithmetic accuracy
d check depreciation charge is reasonable
having regard to residual value and useful
lives of assets

13(b) Where depreciation rate have been revised check

to ensure that revised rate is in accordance with
remaining useful life.

14 In respect of idle plant ensure that depreciation

is charged as per IAS and adequate disclosure
is made

15 Select a sample of items from fixed assets

register and

a. check physical existence

b. check title documents for land and building
and in case of vehicles also check registration
documents.

Tangible.XLS Page 5 of 8
 Rizwan & Co. Completed by Reviewed by Reviewed by Schedule
Chartered Accountants (SPS/AM) (Partner)

CLIENT : Shopistan (Private) Limited

ACCOUNTING PERIOD : June 30, 2020 Date : Date :
AUDIT PROGRAMME OF : TANGIBLE FIXED ASSETS

INITIAL CONCLUSION
REVIEW S= Satisfactory STAFF
ASSERTION TEST TEST DESCRIPTION BY N= Non-satisfactory SCHEDULE INITIAL/
S or FWQ GRADE
Dt: N Reference
C E A V
16 Review results of physical verification of fixed
assets and

a trace to fixed assets register

b for idle or under utilized assets observed,
determine adequacy of provision made for
permanent diminution in value

17 Obtain future plans/budgets for capital expendit-

ures for reporting as capital commitments

18 Check to ensure that the treatment of exchange

difference on liabilities incurred for acquiring
fixed assets is in accordance with accounting
standards applicable in Pakistan.

19 Check to ensure that cost of assets does not

include interest after commissioning of plant/
qualifying assets.

20 For assets built by client itself, check

a cost of material with supporting documents

b labor charge with related labor cost
c overheads with support and relevance
d cut off procedure to ensure completeness

21 Obtain status confirmation from Architect/Engin-

eers for CWIP:
a completed during the year
b pending contracts at the balance sheet date

22 a check revaluation entries with independent

valuer's report
b obtain and check minutes of board of
directors for adoption of revaluation

Tangible.XLS Page 6 of 8
 Rizwan & Co. Completed by Reviewed by Reviewed by Schedule
Chartered Accountants (SPS/AM) (Partner)

CLIENT : Shopistan (Private) Limited

ACCOUNTING PERIOD : June 30, 2020 Date : Date :
AUDIT PROGRAMME OF : TANGIBLE FIXED ASSETS

INITIAL CONCLUSION
REVIEW S= Satisfactory STAFF
ASSERTION TEST TEST DESCRIPTION BY N= Non-satisfactory SCHEDULE INITIAL/
S or FWQ GRADE
Dt: N Reference
C E A V
c check accuracy of the information provided
to valuers.
d check depreciation is calculated on revalued
amount
e check reasonableness of assumption made
by the valuers in arriving at the valuation.

23 Obtain board resolution for purchase of fixed

assets of Rs. 200,000 and above and for disposals
of items costing Rs. 100,000 and above.

24 Check that the depreciation method is consistent

with the preceding year

D PRESENTATION

1 Ensure that following information has been

obtained and checked for disclosure

- classification of,
a capital work in progress (also give move-
ment)
b stores and spares held for capital expend-
iture
c is the grouping of expenditure during
construction period under following
broad heads:-
- formation expenses
- direct project costs
- indirect costs
- borrowing costs

2 Confirm that financial statement disclose

a the capitalisation rate used to determine

amount of borrowing costs eligible for capita-
lisation

Tangible.XLS Page 7 of 8
 Rizwan & Co. Completed by Reviewed by Reviewed by Schedule
Chartered Accountants (SPS/AM) (Partner)

CLIENT : Shopistan (Private) Limited

ACCOUNTING PERIOD : June 30, 2020 Date : Date :
AUDIT PROGRAMME OF : TANGIBLE FIXED ASSETS

INITIAL CONCLUSION
REVIEW S= Satisfactory STAFF
ASSERTION TEST TEST DESCRIPTION BY N= Non-satisfactory SCHEDULE INITIAL/
S or FWQ GRADE
Dt: N Reference
C E A V
b the existence and amounts of restrictions on
title, and property, plant and equipment
pledged as security for liabilities;
c the amount of expenditures on account of
property, plant and equipment in the course of
construction

3 Confirm that the financial statements disclose,

in respect of each class of property, plant and
equipment:
a depreciation method
b useful lives/rates used

- movement in significant items in capital

work in progress

- stores and spares held for capital expenditure

- the date of commencement of commercial

production is the date when the plant is
ready for production of intended products
in commercial feasible quantities without on
regard to the fact that when the plant actually
commences commercial production

4 When items of property, plant and equipment are

stated at revalued amounts, has the following
items been disclosed :

a the basis used to revalue the assets;

b the effective date of revaluation;
c whether an independent valuer was involved;
d the nature of any indices used to determine
replacement cost;
e the carrying amount of each class of property,
plant and equipment that would have been
included in the financial statements had the
assets been carried at cost less depreciation

Tangible.XLS Page 8 of 8