Terms of Reference (TOR) for the External Auditors

Terms of Reference (TOR) for the External Auditors

Background:

Objective of the Audit:

1.The objective of the audit of CDTD financial statements is to enable the auditors to express an independent professional opinion on the financial position of CDTD and to ensure that the funds utilized by CDTD activities have been used for their intended purposes.

2.The books of accounts of CDTD provide the basis for preparation of the CDTD Financial Statements. Proper books of accounts as required by law have been maintained by CDTD and also maintain adequate internal controls and supporting documentation for the CDTD transactions.

Scope of the Audit

1.The audit will be carried out in accordance with the International Auditing Standards and will include tests and verification procedures as the auditors deem necessary.

2.The auditor will conduct Risk analysis strategy and audit approach by type of risk. He will then decide what additional tests to conduct based on the risk.
3.Verify all funds have been used in accordance with the established rules and regulations of CDTD and only for the purposes for which the funds were provided.
4.Goods, works and services financed have been procured in accordance with the CDTD established rules and procedures.
5.Appropriate supporting documents, records and books of accounts relating to all activities have been kept. Clear linkages should exist between the books of accounts and the financial statements presented to the Auditors.
6.The financial statements have been prepared by CDTD management in accordance with the applicable accounting standards and give a true and fair view of the financial position of CDTD and of its receipts and expenditures for the period ended on that date.
7.Comprehensive assessment of the adequacy and effectiveness of the accounting and overall internal control system to monitor expenditures and other financial transactions.
8.Express an opinion as to the reasonableness of the financial statements in all material respects.
9.Include in their reports opinion on compliance with procedures designed to provide reasonable assurance of detecting misstatements due to errors or fraud that are material in
10.Conduct entry and exit meeting with the Executive Director of CDTD.
11.ICS audit approach and evaluation.
12.Integrate
13. IT risks in the audit strategy.
14. Indicate how your audit firm’s seniors will be involved in the audit engagement.

Audit Duration:

The audit work shall be completed within two weeks from the date of commencement of the audit.

We expect to have an opening and closing meeting with the engagement partner to brief the management on any matter that comes to their attention.

Deliverables:

1.The Auditors on completion of the audit work will submit 5 (five) original copies of the Audit Report appended to the Financial Statements along with the reports to the attention of the Executive Director.

2.In addition to the audit report, the auditors will prepare a Management Letter on the following:
a. Give comments and observations on the accounting records, procedures, systems and controls that were examined during the course of the audit.
b. Identify specific deficiencies and areas of weakness in systems and controls and make recommendations for improvement.
c. Report on the implementation status of recommendations pertaining to previous period audit reports.
d. Communicate matters that have come to their attention during the audit which might have a significant impact on the sustainability of the organization.
e.Bring to the Executive Director’s attention any other matters that the auditors consider pertinent.

Qualification of the Audit Firm:

The audit firms based in Kenya having ICPAK membership and in good standing with ICPAK will be eligible to apply. Practicing License of the partners and the firm and Tax Compliance Certificate are to be submitted together with the quotation for audit services.

Names of core audit team members and their relevant experience and qualification.
Relevant audit experience of the firm in audit similar organisations like CDTD

Audit Fees:

The audit fees will be fixed through a competitive bidding process.