AUDIT & ASSURANCE

1. Audit and Assurance

1. External/Statutory Audits

We offer external and or statutory audit and assurance services to our clients in all the industries and business segments by paying attention and addressing each assignment keenly according to their area of specialization.

We go extra mile to assess and understand clients’ business environment and industry in a pragmatic way in order to determine the best audit approach to offering the best solutions and carrying out assignments in conformity with the International Standards on Auditing (ISA)

We adopt a Risk-Based audit approach which blends technical competencies and industry experience with a detailed knowledge of our client’s needs. We obtain an in-depth understanding of the risks associated with each operating cycle and focus more on the riskier areas.

At ENJ East Africa LLP, we conform to rigorous standards of professional competence, maintains independence and objectivity and we uphold client confidentiality.

Our major considerations when choosing audit our approach include but not limited to;

1. Obtaining a clear understanding of the client’s business in areas of finance and business perspective, the nature and size of the business, the control environment and external factors affecting the business, the style of management, and the economic and legal environment in which the entity operates
2. Developing a detailed audit plan while focusing on high risk areas and planning our strategy to apply during the assignments.

• Ensuring proper briefing is always done to the engagement team by managers and partners

1. Creating ways to respond and address the changes that may arise during the engagements
2. Working closely with the management to ensure that assignments are executed in time and issues addressed seamlessly.
3. Adhering to quality control policies and standards during the engagement

At the end of each audit, we add value to your business through the provision of constructive and pragmatic advice through a management letter.

At any given time, our role is to provide an assurance that the financial statements presented by the management represent a true and fair view financial position of the organization.

1. Internal Audits

Internal auditing is an objective assurance and consulting activity designed to add value and improve an organization’s operations. It can help an organization accomplish its strategic objectives by bringing a systematic, disciplined approach to evaluating and improving the effectiveness of risk management, control, and governance processes.

ENJ East Africa LLP internal audit team will help boards and senior executives to better manage enterprise risks.

We help organizations to enhance the effectiveness, quality, and value received from internal audit (IA).

Our broad understanding of risks and areas of operational improvement can help internal audit functions improve their performance and efficiency and bring value to their organizations.

Internal Audit helps management to understand what the organization’s key risks to success of their strategic trajectory are and subsequently then provide assurance to key controls of managing those risks.

1. Project Audits

We have a vast experience of project audit engagements of projects with timelines such as donor funded programs, charities and audits of components of a project in nature and similar assignments. High level of monitoring and evaluation reporting is required for project audits.

Project audit is designed to provide a reasonable level of assurance to providers of grants and management engaged in using funds for projects and other value for money considerations. Most organizations are required to prepare at least annual financial statements to record their activities. Often other reporting is also required; for example, on the spend relating to individual grants, or to satisfy the needs of a regulator or other interested party. Our project audit services will help you meet requirements, as well as the particular needs of your grant organization.

At ENJ East Africa, we understand the need and objectives of donor fund that needs to be utilized properly in the activities of the projects and properly accounted for.

We note all the variances in budgeted amounts versus the actual spending and seek clarifications to ensure the activities and related expenses are authentic and the donors resources are not misappropriated.

1. Forensic Audits

A forensic audit is an examination and evaluation of a firm’s or individual’s financial records to derive evidence that can be used in a court of law or legal proceeding.

Our Forensic auditors have the expertise of accounting and auditing procedures as well as expert knowledge about the legal framework of such an audit.

Forensic audits cover a wide range of investigative activities. A forensic audit may be conducted to prosecute a party for fraud, embezzlement, or other financial crimes. In the process of a forensic audit, the auditor may be called to serve as an expert witness during trial proceedings.

Forensic audits could also involve situations that do not involve financial fraud, such as disputes related to bankruptcy filings, business closures, and divorces. 

Reasons to Conduct a Forensic Audit

Forensic audit investigations can uncover, or confirm, various types of illegal activities. Usually, a forensic audit is chosen, instead of a regular audit, if there’s a chance that the evidence collected would be used in court.

The following are instances that could necessitate a forensic audit;

1. Corruption or Fraud

In a forensic audit, an auditor would be on the lookout for

Conflicts of Interest—when a fraudster uses his or her influence for personal gains to the detriment of the company. For example, if a manager allows and approves inaccurate expenses of an employee with whom he has personal relations.

Bribery—offering money to get things done or influence a situation in one’s favor.

Extortion—the wrongful use of actual or threatened force, violence, or intimidation to gain money or property from an individual or entity.

1. Asset Misappropriation 

This is the most prevalent form of fraud. Examples include: misappropriating cash, submitting falsified invoices, making payments to non-existent suppliers or employees, misusing assets (like company equipment), and stealing company inventory.

• Financial Statement Fraud 

A company can get into this type of fraud to try to show that its financial performance is better than it actually is. The goal of presenting fraudulent numbers may be to improve liquidity, ensure that C-suite level executives continue to receive bonuses or to cope with the pressure to perform. 

How Forensic Audits Work 

The process of a forensic audit is similar to a regular financial audit—planning, collecting evidence, writing a report—with the additional step of a potential court appearance. The attorneys for both sides offer evidence that either uncovers or disproves the fraud and determines the damages suffered. They present their findings to the client, and to the court should the case go to trial.

Planning the Investigation 

During the planning stage, the forensic auditor and team will plan their investigation to achieve objectives, such as

• Identifying what fraud, if any, is being carried out
• Determining the period during which the fraud occurred
• Discovering how the fraud was concealed
• Naming the perpetrators of the fraud
• Quantifying the loss suffered as a result of the fraud
• Gathering relevant evidence that is admissible in court
• Suggesting measures to prevent such frauds from occurring in the future

Collecting Evidence

The evidence collected should be adequate enough to prove the identity of the fraudster(s) in court, reveal the details of the fraud scheme, and document the financial loss suffered and the parties affected by the fraud.

A logical flow of evidence will help the court in understanding the fraud and the evidence presented. Forensic auditors are required to take precautions to ensure that documents and other evidence collected are not damaged or altered by anyone.

Reporting 

A forensic audit requires a written report about the fraud to be presented to the client so that they can proceed to file a legal case if they so desire. At a minimum, the report should include

• The findings of the investigation
• A summary of the evidence collected
• An explanation of how the fraud was perpetrated
• Suggestions for preventing similar frauds in the future—such as improving internal controls

Court Proceedings

The forensic auditor needs to be present during court proceedings to explain the evidence collected and how the team identified the suspect(s). He or she should simplify any complex accounting issues and explain the case in a layperson’s language so that people who have no understanding of legal or accounting terms can understand the fraud clearly.

1. System Audits

System Audits deal with the identification and analysis of potential risks, their mitigation or removal, with the aim of maintaining the functioning of the information system and the organization’s overall ICT infrastructure.

Our system audit services include:

1. System Audit, Review and Assessment
2. IT Risk Management

• IT Due Diligence

1. Vulnerability Assessment and Penetration Testing

System audit constitutes an assessment of IT system management, its alignment to corporate management, vision, mission and organizational goals.

Our System Audit review and assessment aims at achieving the following objectives;

• Systematizing, improving and integrating business procedures and the coverage of business information in the information system
• Identifying risks and weaknesses, thus enabling the definition of solutions for introducing controls over processes supported by IT
• Accelerating the business information collection process
• Centralizing the control system and eliminate bottlenecks in information flow through the IS
• Regulating compliance
• Reducing IT-related costs, as they represent a significant proportion of the organization’s total costs
• Ensuring information confidentiality, integrity and availability
• Assessing ERP system before and after implementation
• Aligning IT assessment and IT strategy
• Attaining IT management standards

Our System Audit Approach includes;

• Testing logical and physical security controls
• Testing IT operations
• Testing disaster recovery procedures
• Testing business continuity
• Data integrity assessment including process assessment and controls identification in ICT infrastructure.
• Assessment of controls over critical system platforms, network and physical components, IT infrastructure supporting relevant business processes
• IT strategy preview
• IT organization review including organizational structure and leadership style
• IT process reviews ranging from helpdesk, service management and application management oversight