Auditing Essentials and Case Studies of Construction Projects

Author: Li Sanxi, Li Ling
Publisher:
Publish Date: 2006-08-01
Features: Part Four Completion Financial Audit (1) One week before the audit, we provide a list of required financial audit materials. The center should provide complete documentation related to the project's commencement. We arrange for internal auditors to conduct a phased audit of the preliminary financial situation. (2) During the entire process of project auditing, the financial audit will enter at appropriate times or arrive at the site as requested by the client. The completion financial settlement audit will be conducted after the project settlement is fully completed. The specific implementation process of the completion financial settlement audit is as follows: (1) The client provides relevant materials for the project settlement audit, including related accounting documents for the financial completion settlement audit. (2) Review whether the project's establishment procedures are complete and compliant with national regulations. (3) Review whether the project has control systems and whether these systems are strictly and effectively implemented. (4) Review whether the project has a budget estimate and whether the cost expenditures are controlled within this range. (5) Review whether the financial documents reflecting fund operations during the project construction are true and complete. (6) Verify economic contracts such as the project contract, survey and design fee contract, and supervision contract. (7) Review and confirm the sources of funds and cost expenditures for the project. Is the use of funds compliant? Are there issues such as diversion, occupation, misuse, or loss and waste of construction funds? (8) Review and confirm all economic contracts, construction consultations, advance payment for project costs, advance payment for materials, materials provided by the client, consulting fees, information fees, service fees, and advances. (9) Verify the execution of economic contracts and provide a detailed list of the total contract amount, payments made, and payments outstanding. (10) Obtain the names of all construction units, construction contracts, and "settlement of project prices" for payment of project costs, and verify the legality of various intercompany receivables related to the project. (11) Verify and confirm the execution of economic contracts for materials provided by the client. (12) Verify and confirm the authenticity and legality of repayment of advances and advances made on behalf of others. (13) Audit the authenticity and legality of fixed assets and their ownership details. (14) Audit the reasons for all account adjustments and their authenticity and legality. (15) Review whether there are off-budget assets. (16) Review the authenticity and legality of the basis for management expenses. (17) Review the authenticity and legality of the basis for interest on loans. (18) Audit whether the project completion financial settlement report and its accompanying notes are true, comprehensive, and legal; whether the basis for preparing the completion financial settlement complies with regulations, whether the materials are complete, whether the procedures are proper, whether all cleanup work is thorough, whether the property delivered for use is true and complete, whether it meets the conditions for delivery, whether the handover procedures are complete and compliant, whether the cost accounting is correct, and whether there are issues such as cost, cost increase, or investment diversion. Whether the basis for investment diversion, capital write-offs, and expenditures is sufficient, whether the procedures are proper, whether the content is true, whether the accounting is compliant, and whether there are issues such as fictitious investment. Whether the sources, allocation, submission, retention, and use of capital construction revenue are true and legal. (19) After the completion financial settlement audit is completed, an draft of the completion financial settlement audit report is issued. Based on the issues identified during the audit, treatment opinions are provided in accordance with specific national laws and regulations. Detailed explanations are provided for audit adjustments. An audit report and a detailed list of relevant project information are issued based on the audit findings. After exchanging opinions with the project developer, the final version is determined, and the audit report is issued within one week. (20) Based on the specific project details, a management recommendation book is issued.
San Tai Group Capital Construction Audit Department February 2006, P41-42