Expenditure verification is an engagement to perform certain agreed-upon procedures regarding financial reports under a specific service contract. The objective of such a service is for the Auditor to carry out specific procedures agreed upon with a client, and to submit to the client a report of factual findings about specific verification procedures performed. Verification means that the Auditor examines the factual information in a financial report and the invoice of the grant beneficiary and compares it against the terms and conditions of the Service Contract.

As this engagement is not an assurance engagement the auditor does not provide an audit opinion and expresses no assurance.

Expenditure verification is undertaken in accordance with the International Standard on Related Services (‘ISRS’) 4400 Engagements to perform agreed-upon Procedures regarding Financial Information as promulgated by the IFAC and the IFAC Code of Ethics for Professional Accountants (developed and issued by IFAC’s International Ethics Standards Board for Accountants (IESBA), which establishes fundamental ethical principles for auditors with regard to integrity, objectivity, independence, professional competence and due care, confidentiality, professional behaviour and technical standards.

Auditor plans the work so that an effective expenditure verification can be performed. In performing the verification, the auditor applies specific procedures and donor’s guidelines for collecting evidence in form of any financial and non-financial information which makes it possible to examine the expenditure claimed by the beneficiary in its financial report. The auditor uses the evidence obtained from these procedures as the basis for the report of factual findings. The auditor documents matters which are important in providing evidence to support the report of factual findings, and evidence that the work was carried out in accordance with ISRS 4400.