Audit Instructions

Institutional Audits 2025

Prepared for Cooperation partner whose financial support is channelled through SHED, a non-governmental organisation based in Liberia.

SHED hereafter referred to as the “Cooperation partner” wishes to engage the services of an audit firm for the purpose of auditing the eentity’s financials as stipulated in the partnership agreement between the Cooperation partner and Mercy Corps Liberia.

1. SCOPE

We ask you to conduct a Special Purpose Audit concerning the business according to the list provided to you.

The receiving organization must observe principles related to good governance and anti-corruption activities. The funds shall be used only to cover expenses considered to be necessary and reasonable in carrying out the business activities. The support receiving organization shall in its accounting follow the generally accepted national accounting principles (GAAP). The audit should be carried out in accordance with generally accepted international auditing standards as applicable and relevant national legislation and standards.

2. Objectives and scope of the audit

The objective is to audit the financial report for the period March 1, 2024 to February 28, 2025 as submitted to Mercy Corps and to express an audit opinion according to ISA, applying ISA 800/ISA 805, on whether the financial report of SHED Liberia is in accordance with the Cooperation partner´s accounting records requirements for financial reporting as stipulated in the agreement including appendices between Mercy corps and Cooperation partner (Agreement).

The nature of a business is as follows:

• A business is a legal entity with an accounting subject
• It can include transactions in more than one legal entity (e.g. Partner or Subsidiary)
• The statements under audit are the business Financial Reports and the List of Fixed Assets
• Fixed Assets are not capitalized but recorded as cost when purchased

3. REPORTING

We ask you to send the Auditor’s Report to the SHED Liberia Country Office through the following email address: joyce.pajibo@shed-liberia.org

The report should be in English and include the following items:

• Business number and name
• Implementing organization
• Date of the partnership (Subaward Number: 91540S001) agreement
• Reporting period and currency
• Total amount of budgeted income and expenditures (including balance from previous year)
• Total amount of actual income and expenditures (including balance from previous year)
• Closing balance (including cash, bank and other assets like advance payments and outstanding checks)
• Auditor’s name, position, address, phone, and e-mail
• Date, auditor’s signature and authorization
• Observations on the issues below

4. OBSERVATIONS

The Auditor’s Report should offer a specific observation in each area listed below:

1. Does the business financial report match with the bookkeeping?
2. Does the business financial report correspond with the partnership agreement?
3. Do the received funds match with the bookkeeping?
4. Does the bookkeeping match with the vouchers?
5. Are there proper approved and duly completed vouchers for the transactions?
6. Is there adequate bookkeeping, including journal and general ledger?
7. Do the changes in the list of fixed assets match with the vouchers?
8. Have the bank accounts and cash been reconciled and does the bookkeeping match with the bank confirmation and official bank account statements and cash book?
9. Does the opening balance of the funds correspond with the audit report of last year?
10. Is the approved business financial report free of material misstatement?
11. Are the received, unused funds properly recorded as a liability in the balance sheet and included in the ending balance of the business financial report.
12. Are the recorded expenses in the business report in line with the approved original budget and activity plans? The report should contain explanations of deviations larger than 25 percent.
13. Is the internal control system of the organization in place? Are there any material weaknesses that the organization should improve?
14. Do the salaries of the personnel match with existing properly signed employment contracts?
15. Has social security expenses including pensions and taxes been recorded and paid to the relevant authorities in accordance with national legislation?
16. Does the organization have copies of all valid essential contracts (government, trading, lease, service agreement)?

5. Selection Criteria:

Eligibility Criteria- Grading (Yes or No)

• Valid Tax Clearance Certificate
• Valid Business Registration
• Current practicing license issued by a recognized accountancy body

Technical Criteria

• Experience of the firm in conducting similar audits in the past 3 years
• Adequate experience and capacity (CV’s of the Key staff)
• Sufficient trained managers and workers (CV’s of the staff to be conducting audit)
• Prior (SHED Entity/Mercy Corps) Audit Experience
• References from previous clients (Three references)
• Recognized bank account (copy of proof)