Auditing Whats Involved?

NEWS
Fighting erupted in South Sudan's capital, Juba, in mid-December 2014 triggering clashes throughout much of the country. Several ceasefire agreements and ongoing negotiations have failed to bring an end to the conflict. Disagreements over many aspects of the July 2011 division of Sudan and South Sudan, notably border delineation, look set to continue, but the two countries will try to maintain general co-operation.  Sudan's real GDP is expected to grow by an average of 3.7% in 2015-19 (Source EIU).

Middle East - Asia investment. China a key player

China to double Iranian investment http://t.co/jxs1eHfQRj

— BBC News (World) (@BBCWorld) November 16, 2014

Banking - how are the top 5 and top 50 getting on?

Banking The 2013 results make interesting viewing https://t.co/yVP7aFjoXn Top 50 Banks paid some $136bn in tax and some $136bn in dividends

— peter i brealey (@KhartoumFCA) October 24, 2014

Banking 2013 results Top 5 to Top 50 Total loans/Tier1 capital 7x, 9x Post tax profit to assets 0.9%, 0.6%. Non performing loans 1.3%, 2.6%

— peter i brealey (@KhartoumFCA) October 24, 2014

Inflation in Sudan

Sudan’s Central Bureau of Statistics (CBoS) said the monthly inflation rate has declined to 39.2% in September compared to 46.4% in August.

The official dollar exchange rate stated by the Central Bank of Sudan (CBoS) is 5.8 SDG.

Sudan’s economy was hit hard since the southern part of the country declared independence in July 2011, taking with it about 75% of the country’s oil output.

The Sudanese pound has lost more than half its value since South Sudan’s secession, pushing inflation rates to record levels given that the East African nation imports most of its food.

1. http://www.sudantribune.com/spip.php?article52719
2. http://www.sudantribune.com/spip.php?article52311
3.  http://www.cbs.gov.sd/en/


Inflation in Sudan is sensitive to the price of imported foodstuffs as meat, bread, grains and legumes and vegetables which amounts to 36% of the total consumer spending.

Country Subject Descriptor Units Scale Country/Series-specific
Notes 2010 2011 2012 2013
Estimates Start After Sudan Inflation, average consumer prices
 Index Source: National Statistical Office. Central Bureau of Statistics.
Latest actual data: 2010 Harmonized prices: No Frequency of source data: Monthly Base year: 2007/08. January 2007=100 Primary domestic currency: Sudanese Pound. Data last updated: 09/2013
2010 2011 2012 2013
143.666 169.661 229.975 303.839 2010

Sudan Inflation, average consumer prices Percent change
 See notes for: Inflation, average consumer prices (Index).

 2010 2011 2012 2013
12.990 18.094 35.550 32.118

2010 International Monetary Fund, World Economic Outlook Database, October 2013
http://www.imf.org/external/pubs/ft/weo/2013/02/weodata/weorept.aspx?pr.x=85&pr.y=5&sy=2010&ey=2013&scsm=1&ssd=1&sort=country&ds=.&br=1&c=732&s=PCPI%2CPCPIPCH&grp=0&a=#download

The Khartoum Stock Market

The Khartoum Stock Exchange was established in 1994 following the passage of the Securities Market Act by the Transitional National Assembly. The Khartoum Stock Exchange is the only market which operates according to Islamic Sharia law. There are currently eight brokers on the Khartoum Stock Exchange.

Tax rates in Sudan

Public finance

Highlights of today's #MEFMI14 Africa Ministers & Central Bank Govs' meeting in Washington DC @EY_GovtPublic https://t.co/c22TVnnXSR

— EY (@EYnews) October 6, 2014

Serving the public interest

With the great Arthur Bailey President of the ICAEW at LANSCA bash. ICAEW members represent nearly 1.5m UK businesses pic.twitter.com/jow9B6Lby7
— peter i brealey (@KhartoumFCA) October 4, 2014

The future of audit reports?

KPMG Rolls Royce - beyond true and fair. The future of audit reports or should auditors stick to the knitting? http://t.co/5YQIXSGk7X
— peter i brealey (@KhartoumFCA) September 29, 2014

Background paper on restoring trust 

MODEL IFRS ACCOUNTS

President Kiir addresses UNGA

Full text

"Our oil flows through the Sudan. In the spirit of cooperation, my Minister of Foreign Affairs and International Cooperation will soon commence more joint visits with his Sudanese counterpart to donor countries, to appeal and lobby for lifting and waiving Sudan’s foreign debt, as it was agreed in the Cooperation Agreements." 

Near 60 years of audit tax and advisory service

The Abdel Latif El Tayeb team at play 1980

Auditors, the audit plan, the audit programme and internal control

The audit plan helps obtain sufficient appropriate evidence for the circumstances, keep audit costs down, helps avoid misunderstandings.  The audit plan requires knowledge of client's business, development of audit strategies (who, when and how), preparation of the audit programme of testing of controls and transactions.  

Getting it wrong - Companies can exhibit 5% stock price decline following announcement of accounts restatement; decline 20% if due to fraud.  Trust but verify - Shareholders expect an objective third party to provide assurance that the information is accurate not to identify fraud.  

In practice Audit committee effectiveness likely depends not only on qualification but engagement. Objective is to improve earnings quality.  Auditors identify items that could be materially misstated, design and execute tests to determine whether such misstatements have occurred.  

Auditors generally test assertions accuracy in three areas — transactions and events, account balances, presentation and disclosure.  Auditors identify items that could be materially misstated, design and execute tests to determine whether such misstatements have occurred.  

Auditors judge their work scope and findings against materiality of uncorrected errors which make statements of income and assets inaccurate.  

Audit materiality is not just a number crunch of assets and income. Failure to understand the many qualitative factors can cause restatement.  

When audit risk is high, auditors carry out more extensive testing, less reliance on the work of others and less testing of controls. So besides regulatory requirements investment in and maintenance of internal control materially impacts the quality of financial statements

1. ISA300 https://www.frc.org.uk/Our-Work/Publications/APB/ISA-300-Planning-an-audit-of-financial-statements.pdf

Chartered Institute of Internal Auditors

Become an audit leader. Unlock your potential with the new Qualification in Internal Audit Leadership. http://t.co/4fFVcDIZgb
— TheIIA (@TheIIA) September 27, 2014

Oman 
Arabic materials

Fair value - Calculating terminal value in Stock Market Two Stage DCF valuation

Calculate the Terminal Value 
Having estimated the free cashflow produced over the 5 year forecast period, we need to come up with a reasonable idea of the value of the company's cash flows after that period. To help us do this we use, for students of Sudanese history, the easily remembered "Gordon" growth model.

Gordon Growth Model There are several ways to estimate a terminal value of cash flows, but one well-worn method is to value the company as a perpetuity. The model uses this formula:

Terminal Value = Final Projected Year Cash Flow X (1+Long-Term Cash Flow Growth Rate) (Discount Rate – Long-Term Cash Flow Growth Rate)

Reference
1  http://www.investopedia.com/university/dcf/dcf4.asp
2 Why use the Morningstar Ibbotson method http://www.stb.dot.gov/decisions/readingroom.nsf/WebDecisionID/39443?OpenDocument
3 Morningstar Equity Research http://www.morningstar.co.uk/uk/research/equities

Using the Cloud to control audit assignments and work of fieldwork teams

Statement of Cash Flows

Video
Introduction
Summary of IAS7