TOR External Auditor – Ayuda En Accion Ethiopia

Accounting and Finance

Ayuda En Accion Ethiopia

We are a non-partisan and non-denominational NGO that fights against poverty and inequality. We promote dignity and solidarity for the construction of a just world .

We have more than 37 years of history . With your help today we work in 20 countries in Latin America, Asia, Africa and now also Spain and we support more than 2 million people

External Auditor

Background

Ayuda en Accion is an international non-governmental organization with the headquarters in Madrid, Spain. Between 2002 and 2017, the organization implemented development and humanitarian interventions in Ethiopia through local partnerships. In 2018, it was officially registered as Ayuda en Accion Ethiopia. The national office in Addis Ababa coordinates the country programme implemented in Oromia (Borena and Arsi), Southern Nations, Nationalities and People’s Region (Wolaita) and Afar.

 Since the registration in the country, Ayuda en Accion Ethiopia has complied with both statutory audit obligations in Ethiopia as well as organizational audit requirements in the last four years (2018 – 2021). The pervious auditors worked closely with KPMG who is Ayuda en Accion’s organizational auditor.

 Ayuda en Accion Ethiopia is now seeking a qualified company that can carry out audit for the 2022 fiscal year to fulfil legal obligations in Ethiopia and those as per Ayuda en Accion headquarters requirements. The selected company will work closely with KPMG to complete this assignment.

 Objective

The objective of the external audit is to express a professional audit opinion on the consolidated financial statements of Ayuda en Accion Ethiopia to state to what extent they are in conformity with the applicable organizational financial rules and regulations and the legal requirements in Ethiopia as per the scope in these terms of reference.

Scope of the audit

The Auditor should review Ayuda en Accion’s accounting and internal control systems in order to assess adequacy as a basis for the preparation of the financial statements and to establish whether proper accounting records have been maintained. Appropriate evidence should be obtained in order to draw reasonable conclusions. The audit will include examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing accounting principles used and significant estimates made by management and evaluation the overall presentation of the financial statements.

The following points require specific attention of the Auditor:

• Confirm that although responsibility for preventing irregularity and fraud remains with the organization, the audit has been planned so as to have a reasonable expectation of detecting material misstatements in the financial statements.
•  Confirm that funds have been used in accordance with the applicable rules of the concerned donors, financial rules and regulations of the land and that they have only been used for the purposes for which they were intended for and in accordance with the conditions under which the funding was provided.
•  Confirm that goods and services financed have been procured in accordance with sound procurement procedures stipulated in the Ayuda en Accion policies, the country’s legal financial rules and regulations, and applicable donors’ regulations.
•  Confirm that all necessary supporting documents, records and accounts have been kept in respect of all activities. Clear linkages should exist between the books of accounts and the financial statements presented.
•  Confirm that the financial statements have been prepared in accordance with acceptable accounting practice and give a true and fair view of the financial position of the organization as at the end of the financial year.
•  Share information with the organization’s external auditor at headquarters in Spain – KPMG.
•  Existence of an effective financial management supervision system
•  The internal control structure for financial reporting, including control systems, are suitably designed and implemented to achieve the control objective.

This scope does not in any way restrict the audit procedures or the methodology that the Auditor may wish to use in forming an opinion on the financial statements being audited.

Financial statements to be audited.

The following documents will be part of the audit:

• statement of income and expenditure.
• statement of financial position.
• statement of expenditure by development areas.
• statement of expenditures by 80/20 programme versus administration cost utilization requirement.

Qualification of the audit firm and team members

Consulting Firm

Legal requirements

The consulting firm should demonstrate the following qualifications and experience to carry out the assignment:

• valid business registration certificate.
• VAT registration certificate.
• tax clearance certification.
• ABEE renewed certificate.

Technical experience

• at least of 3 years in the field of financial accounting and accounting in the public/ private sector.
• considerable experience in the field of international public and/or private sector financial reporting standards (i.e.; IPSAS/ IFRS);
• at least 2 years in the field of development and/or application of accounting demonstrated in recommendation letters and certificates (as an independent auditor).
• experience with similar assignments as stipulated in these terms of reference is an advantage.

 Team Leader

• chartered accountant, CPA, ACCA or equivalent.
• ABEE renewed certificate.
• at least of 10 year-experience in the field of financial accounting and auditing of which at least 5 years have been in the public/private sector.
• experience in carrying out at least one assignment as team leader in the last three years.
• IPSAS professional qualification from the Chartered Institute of Public Finance and Accountancy (CIPFA) or a similar recognized body is an advantage.

Audit report

The Auditor is expected to present two types of reports:

 The opinion on the financial statements

This document has to contain the following:

• a professional opinion on the financial statements and supporting schedules as regard to their true and fair view.
• accounting standards, Authority for Civil Society Organizations, ABEE and Ayuda an Accion Financial Rules and Regulations that have been applied indicating the effect of any deviations from them.
• the international audit standards that were applied.
• any other requirements with respect to cooperating partners as stated in cooperation agreements.

Internal Control Management

This must contain the following:

• comments and observations on the accounting records, systems and controls that were examined during the course of the audit.
• specific deficiencies and areas of weakness in systems and controls and recommendations for improvement.
• the degree of compliance of each of the development partner funding agreement and comments, if any, on internal and external matters affecting such compliance.
• matters that have come to their attention during the audit which might have a significant impact on the implementation and sustainability of the funding.
• report on the implementation status of recommendations pertaining to previous period audit reports.
• areas of risks that need to be highlighted to management.
• any other matters that the Auditor considers pertinent to be brought to the attention of the national office management and the headquarters.

Lien