Послуги з фінансового аудиту – «Карітас Швейцарія» Financial Audit Services – Caritas Switzerland

Caritas Switzerland requires projects to be implemented in a proper manner. This also includes the correct keeping of project accounts as well as compliance with internal requirements in accordance with the Internal Control System (ICS).

The Financial Information of the project/program shall be audited in accordance with International Standard on Auditing (ISA) 805 ‘Special Considerations – Audits of Single Financial Statements and Specific Elements, Accounts or Items of a Financial Statement’ for single project audits.

Appended to these Terms of Reference is a questionnaire on the ICS.

1. Fundamental principles
   • The financial audit of projects (“financial audit”) is to be carried out by an independent auditor (“the auditor”), having the required professional competence and experience (e.g. certification by national audit oversight authority). Outside Switzerland: authorized e.g. by the IFAC (International Federation of Accountants) or an equivalent organization), and in accordance with International Standards on Auditing (ISA).
   • These Terms of References (“TOR”) define the mandate of the auditor in connection with the financial audit of projects/programs with Caritas Switzerland (hereinafter also referred to as the “Contractual Partner”), financed by Caritas Switzerland. The financial audit is based on the professional requirements and guidelines governing the professional work to be undertaken by an auditor.
   • In planning, conducting and reporting on the financial audit, the auditor has to follow the ISA 805.

In addition, the relevant standards of the local accounting profession as well as the local legislation on accounting and reporting in force in the country in which the financial audit is carried out need to be taken into consideration by the auditor.

2. Overall objective of the financial overview

The objective of the requirements of Caritas Switzerland is to ensure the effectiveness of the NGO’s activities and the institution’s accounting process as well as the proper appropriation of funds received from donors and the transparent disclosure of accounting and financial information.

The auditor’s objective is to perform audit procedures suitable for minimizing the risk of a material false representation of financial information. To this end, they will acquire an understanding of the organization and its environment, including its ICS. The auditor will use this understanding to identify and assess the risks of a material false representation of financial information and thereby create a basis for their planning and how they conduct the audit.

The following aspects are to be taken into consideration in the context of finances and accounting:

• Management and reconciliation of cash and bank accounts; cash management procedures and their effectiveness from a control perspective
• Processes for customer loans and savings accounting, monthly reconciliation procedures;
• Preparation of salary statements, accounting, and staff monitoring
• Booking money received from donors and ensuring that it is used in accordance with the conditions agreed with these donors
• Existence of and compliance with measures to prevent double invoicing/double funding
• Books of account, receipts and other vouchers
• Annual financial statements (balance sheet, profit and loss account)
• Budget control
• Internal controls, in particular internal financial controls

The auditor should acquire sufficient familiarity with these aspects to be able to carry out audit procedures in a manner that is fit-for-purpose.

3. General procedural principles

The auditor is required to plan, perform and report on the financial audit in order to conclude on the following matter: 

• Principles of orderliness (financial regularity/reporting)

Furthermore, the auditor is required to assess whether the partner has adequate policies and procedures in place relating to the following matters (these matters are not covered by the audit engagement in accordance with the ISA, as mentioned above, but are substantiated by means of the attached Questionnaire and/or Management Letter):

• Existence, adequacy and effectiveness of the Internal Control System (ICS)

• Conformity with the project objectives and adherence to the contract conditions

• Economical conduct of business and effective use of financial resources

• Existence of and compliance with security measures to prevent double invoicing/double funding

In order to assess these procedural principles, the Auditor shall consider the questions in the attached Questionnaire (Annex 1). While item 3.1 shall be reflected in the audit report prepared in accordance with the ISA, items 3.2 to 3.5 do not constitute an audit in accordance with an international standard and no formal assurance is required. These items shall be reflected separately in the answers of the Auditor to the Questionnaire in Annex 1 and recommendations to the management shall be formulated in line with Annex 2 (Management Letter).

With regard to principle 3.3, the questions in the Questionnaire and items in the Management Letter refer to the locally paid and reported expenses which are within the scope of the Audit and do not include project expenses that are centrally budgeted, calculated and charged to the project and paid or recorded outside of the country of implementation.

The Auditor shall clearly state and provide reasons for any expenses not budgeted and paid in the country of project implementation, or are not part of the local accounts, which are included in the statement(s) of expenditure as per the Annex to the audit report.

4. Reference documents

In performing the Audit, the Auditor shall give due consideration to the following basic reference documents and matters:

                                             Financial and operational reports concerning the project/program

                                             Financial manuals / procedures

Auditor:                              Prior internal and external audit reports of the partner

                                             Any other information requested from the partner by the auditor.

5. Planning the financial audit

The Auditor shall adequately plan the Audit well in advance of the work and ensure that the Audit is performed to the highest professional standards and in an economical and efficient manner as agreed in the contract between the Partner and the Auditor. 

On the basis of the information received during the planning phase, including the auditor’s risk assessment, the auditor shall determine:

• the type of transactions to be audited and the audit methods (full audit or sample selections);
• the type of physical counts or examination and the sites to be selected;
• the number of site visits to be planned.

The auditor ensures continuity in the audit approach of the financial audit engagement and the audit team, even if there is a change in the leader of the engagement team from the prior year. 

6. Place of financial audit

The Audit shall be carried out at the country office and in the project environment (administrative offices and/or decentralised sites, if applicable).

7. Management representation of full disclosure

The Auditor shall obtain a letter of representation signed by the Partner’s management stating that

1. the Partner acknowledges its responsibility to keep accounts and financial documents that are correct, complete, fair and represent the true facts and are in accordance with the objectives of the project, the reference documents (description of the project, contracts, budgets, etc.) and national legislation;
2. all accounting records, supporting and other documents, minutes and any other pertinent information necessary for the Audit will be made available to the Auditor;
3. the information regarding tangible assets and property is complete;
4. the information regarding financing received or due and the Partner’s own financing relating to the audited period for the projects being examined is complete;
5. any information and explanations that may be required by the Auditor in the performance of its mandate, either verbally or in writing, will be provided.

8. Detailed financial audit procedures

The Auditor shall apply appropriate audit procedures in order to form a conclusion on the matters outlined below. The procedures applied, either on a full coverage or a sample selection basis, may include controls, checking, evaluations, inspections, interviews, analysis and other audit techniques. When selecting the audit procedures, the Auditor shall give consideration to the results of its risk assessment (during the planning stage and during the course of its audit work).

Accordingly, the Auditor must define and carry out suitable audit procedures in order to obtain an overview of the aforementioned aspects before the Auditor assesses the individual findings and reaches a final independent opinion on the Audit.

The Auditor is expected to select and apply any other audit procedures that the Auditor may consider necessary in the professional performance of the audit engagement.

Upon receipt of the audit report, Caritas Switzerland reserves the right to request other audit procedures to take account of any change in circumstances relating to the project or the Partner.

In addition, in order to ensure adherence to the principles set out in section 2 above, the Auditor shall consider the questions in the attached Questionnaire (template in Annex 1). Any ‘no’ answers must be included as recommendations in the Management Letter (template in Annex 2).

9. Closing meeting

After the completion of the Audit, but before leaving the project or the premises of the Partner, the Auditor shall hold a closing meeting with the persons responsible for the project/programme (directors) and the staff responsible for accounting and reporting. The meeting shall address the results of the Audit, discuss major weaknesses in the project, administrative and financial management (including any shortcomings identified for individual staff members) and make recommendations to improve project management, accounting procedures and the internal control system (ICS).

1. Financial audit deliverables

The audit report of the Auditor shall provide an opinion on the financial information of the Partner in accordance with the ISA (template in Annex 3).

The answers to the Questionnaire (template in Annex 1) and recommendations to the management (template Management Letter  in Annex 2) for the projects as well as the letter of representation shall be provided as separate deliverables together with the audit report.

• Currency and language of the financial audit report

The financial information contained in the audit report of the Auditor shall be expressed in the accounting currency. The audit report of the Auditor and all other documents resulting from the audit engagement must be prepared in English, French or Spanish. 

• Signature

The audit report shall be signed by the leader of the audit team. The financial report for the audited project provided by the Partner shall be signed by a representative of the Partner’s management. 

Place and date:                                            _____________________________________

Caritas Switzerland:                                            _____________________________________

For the auditor:                                            _____________________________________

Annex 1:                             Questionnaire on the Overall principles of the procedures to be performed (3.2 to 3.5)

Annex 2:                             Management Letter

Annex 3:                             Independent auditors’ report (Basis: ISA 805)

Annex 1

QUESTIONNAIRE

Instructions to the local Auditor: a comment is required where this may help explain or clarify the situation. If the answer is ‘n/a’ a comment/explanation must be provided. If the answer to any of the questions is ‘no’, a further explanation must be included in the Management Letter.

Please specify the scope and number of samples in response to questions, as appropriate.

Annex 2

Management Letter (requested format)

project/programme – financial statement period from xx.xx.xxxx to xx.xx.xxxx:

Caritas Switzerland name and address 

auditor’s name and address

Date and Signature

The Auditor was required to assess, using the enclosed questionnaire, whether the Partner has adequate policies and procedures in place relating to the following matters:

• Existence, adequacy and effectiveness of the Internal Control System (ICS)

(principle 3.2 as mentioned in the ToRs)

• Conformity with the project objectives and adherence to the terms of the contract

(principle 3.3 as mentioned in the ToRs)

• Economical conduct of business and effective use of financial resources

(principle 3.4 as mentioned in the ToRs)

• Existence of and compliance with security measures to prevent double invoicing/double funding

(principle 3.5 as mentioned in the ToRs)

All questions answered with a ‘no’ must be itemised in the Management Letter, risk assessed by the Auditor, and followed up by the Partner.

Risk priority rating of Management Letter points

• Matters of major importance regarding the control environment, accounting policies or practices, which might entail a material loss or material reporting error shall be rated by the Auditor as high priority;

• Matters of medium importance regarding the control environment, accounting policies or practices, which are unlikely to entail a material financial loss or reporting error, shall be rated by the Auditor as medium priority;

• Matters of low importance regarding the control environment, accounting policies or practices, or comments relating solely to local reporting matters shall be rated by the Auditor as low priority.

Findings and Recommendations

Annex 3

Audit report template

Financial information audit of multiple projects or of a single project^[1] for the period from xy to xy 20XX

[Name of country office and project(s), project and contract number(s), period of financial statement(s)]

Name and address of Caritas Switzerlands Partner

Background of the mandated organisation

Briefly describe the Partner’s general background:

Country project objectives or single project objective

Briefly describe the objectives of the project/projects:

Name and address of auditor

Independent auditor’s report

Independent auditor’s report on financial information

Implementing partner’s address and name of responsible person

Opinion

Based on Caritas Switzerland’s Terms of Reference, we have audited the financial information for the above-mentioned project(s), which comprises the following financial information:

• the consolidated balance sheet as at (end date of period) and the statement(s) of income and expenditure for the year, starting on [start of period] and ending on [end of period]
• a breakdown of budget vs expenditure by project, and
• the notes to the financial information including a summary of significant accounting policies.

In our opinion, the accompanying financial information on the project(s) for the year [period] ended xxx have been prepared, in all material respects, in accordance with the accounting policies described in the notes and comply with the requirements of the Caritas Terms of Reference dated 01/01/2023. 

Basis for opinion

We conducted our audit in accordance with the International Standards on Auditing (ISAs). Our responsibilities under those provisions and standards are further described in the ‘Auditor’s responsibilities for the audit of the financial information’ section of our report.

We are independent of the entity in accordance with the requirements of the IESBA Code of Ethics for Professional Accountants and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Management’s responsibility for the financial information

Management is responsible for the preparation and fair presentation of the financial information. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial information that is free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.

Auditor’s responsibilities for the audit of the financial information

Our objectives are to obtain reasonable assurance about whether the financial information as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the ISAs always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial information.

As part of an audit in accordance with the ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial information, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management.

Auditor’s signature

Date of audit report

Auditor’s address

Annex: Financial Information (including notes and expenditures per project), Questionnaire, Management Letter

[1] All text in italics to be adjusted according to the type of audit (single project or country programme audit)

Attached TOR – TOR’s 2026

please send Request to – [email protected]