Statutory Audits

An audit of statutory accounts provides assurance to the users of those accounts that they have been prepared in accordance with relevant accounting and regulatory standards. In Nepal, there co-exist a number of special diversified corporate and non corporate entities such as sole proprietorship, partnership firm, trust, nonprofit organization, co-operative societies, and charitable, educational and religious institutions. All these organizations are regulated under various statutory enactments, which require financial assurance and certification. Our professionals specialize in particular sectors and industries, to give a deeper understanding of the challenges that may be faced. Prior to commencing an audit, our audit teams will visit you to understand how your business operates, the risks it faces and how to work with you to complete an effective and high quality audit.

International Financial Reporting ‘s Standard (IFRS)

Over 100 countries now use International Financial Reporting Standards, a number that is set to rise to around 150 countries over the next five years. If you are an ambitious, internationally-active growing organization with plans to expand into overseas markets, you need precise, tailored advice on IFRS.

“The Accounting Standards Board of Nepal has developed Nepal Financial Reporting Standards (NFRS) in compliance with the IFRS. The Institute of Chartered Accountants of Nepal (ICAN) has rolled out phase-wise implementation of NFRS beginning from the Nepali Fiscal year 2014/15.”

The IFRS experts within GSN will support and guide your business through a range of potentially complex IFRS issues.Our IFRS services include:

• IFRS conversion projects
• Valuations involved in business combinations and implementing the acquisition method
• Advice on structuring share option plans and other share based payments
• Audit of IFRS financial statements
• Reconciliations between IFRS and other GAAPs (US or local GAAP)
• IFRS training and technical assistance.

Stock Audit

Internal inventory audit is undertaken to find out shortcoming in inventory records and to give solutions for inventory reduction and its control so that production of items may not stop due to deficiency of stock of material or blockage of money. Inventory reduction and its control are suggested so that production of items will not be stop due to deficiency of stock of material. Stocks and physical assets such as raw materials, products, plant and machinery, office equipment, IT systems etc. are valuable assets of a company.

With companies today operating across multiple locations with various channel partners, ensuring all assets exist as per the books of record is a challenge for the operations and the facilities functions. Stock Audit is an area of specialization and core competence for GSN’s Internal Audit Services. We aim at delivering focused services to companies to keep their physical assets check intact. Our audit team follows a strict audit and reporting mechanism that ensures that every aspect of stocks is evaluated and findings are reported in a transparent manner to levels concerned. Stock audits are also done for banks and other financial institutions which have extended credit to businesses against physical goods and assets. GSN’s large experience gives it the advantage of quality audits at lower costs for clients. Our stock audit service includes:

Environmental Conditions Audit

• Arrangement of inventory in orderly manner
• Ready identification of inventory and WIP
• Storage arrangements, to protect against deterioration
• Identification of WIP, including stage of completion
• Handling of obsolete and damaged stock : identification and segregation

Adherence to Processes & Procedure Audit

• Physical counts
• Comparison of physical counts to computerized records
• Existence of numerical counts for stock, use of tag sheets
• Sampling Inward and Outward stock movement process
• Examination of sealed inventories

Ancillary Processes & Procedure Audit

• Stocks lying at outside locations
• Use of technology for stock management
• Visual documentation of stock (through photographs)

Donor Agency Funded Projects

With more than 40,000 NGOs and nearly 254 INGOs operating in Nepal and annual budget worth billions of rupees that goes unaccounted. Social Welfare Council data shows that 188 INGOs of at least 25 countries allocated 9.91 billion rupees for different NGO-run multi-year projects. Nineteen INGO projects have signed general agreements worth Rs. 693.31 million with the SWC to run more projects through NGOs in coming years.

However, there is a huge accountability deficit among INGOs/NGOs and violation of the provisions of Association Registration Act and Social Welfare Act. This sector remains largely unorganized and plagued with issues streaming from limited knowledge base, inadequate systems and funding.

These factors are obstacles for the sector to achieve its desired objectives. Evaluating the effectiveness of utilization of funds, analyzing problems, developing solutions and implanting adequate systems are some of the concerns that NGO‘s need to address today. There is a need to assist the sector in addressing these issues to help promote overall development.

In Donor Agency-Funded Projects, the Implementing Partner assumes responsibility for ensuring the adequacy of their overall supervision and management. It is responsible for making sure that an adequate and reliable system of internal control is built into the project.

The agencies are accountable to the donors for the quality, timeliness and effectiveness of the services they provide and the activities they carry out as well as for the use of funds provided to them.

The accountability of agencies refers to:

• Substantive accountability for the conducting of all project activities – whether implemented by them directly or by other organizations on their behalf;
• Financial accountability for all funds provided to them for projects;
• Custodial accountability for all equipment, vehicles and other such assets entrusted to them – whether purchased by an executing agencies using donor agency advances or reimbursements, or purchased directly by agencies on behalf of an executing agencies. GSN provides the following services to development sector:
• Financial Certifications & Audits
• Management Audits
• Funded Projects Audits
• Performance Audits
• System Development
• Legal Assistance

Our audit strategy is to work with the project management to build quality into the processes that control financial reporting and key risks facing the projects. We are always specific in findings and recommendations and describe fully the reason or cause for any irregularities or departures from established procedures. The experienced professionals at GSN use a multi-phased approach to help you build a solid internal controls system. Our multi-phased approach is designed to assess and document your agency ‘s internal controls.

Other Assurances

Our assurance services do not end with audits of financial statements. Other forms of corporate reporting and disclosure gain credibility from independent external assurance. Using tried and tested methodologies, we provide a range of other assurance services that are suited to your particular reporting needs, including:

• Service Organisation Control Attestation
• Information systems and controls assurance
• Forensic audit and investigation
• Engagements in accordance with:
  • International Standards on Review Engagements
  • International Standards on Assurance Engagements
  • International Standards on Related Services