Grupo Servicio Medico

2015 Audit of Financial Statements

SUMMARY OF PRELIMINARY AUDIT FINDINGS
Nature of Audit Findings/ Exceptions

Implication

Material
Discrepancy
of
Trial
Balance/
General Ledger Balance with its supporting
schedules
We obtained supporting schedules for each
account and performed detailed tie- in, however
we found out that amount per trial balance do not
tally with total amounts per schedules.
Also, we did not obtain schedules from several
accounts.

The unreconciled balances are indicative of

inaccurate reporting and misstatements may
be present in the financial statements.
Further, during the course of our audit, it
would take time for the engagement team to
ask assistance for the reconciliation of the
balances deemed for testing.

Lack of Monitoring and Reconciliation of

Liability Accounts
We noted that Company does not have subsidiary
ledgers for Accounts Payable, Due to Officers and
other liabilities and it does not properly reconcile
amounts to the general ledger. We performed cutoff and vouching procedures on accounts payable
and other liabilities accounts but we did not obtain
valid supporting evidence. We also noted some
differences as to amounts. Differences of amounts
are not identifiable by the Company and possibly
arise from previous years errors on recording.

Unreconciled and unsupported amounts may

represent payables which do not exist and do
not obligate the Company to pay such
outstanding payables. These findings may
also have the following effects:
Lack of reconciliation may cause errors to be
overlooked
Financial statements will not properly reflect
the financial position of the company if
liabilities and
costs are not correctly
recorded

Management Response

 Failure to reconcile subsidiary ledger with

general ledger will probably be considered a
material weakness
Lack of Monitoring and Reconciliation of
Receivable Accounts
We noted that the Company does not regularly
monitor and reconcile balances of its Accounts
Receivable from Philhealth, HMOs, PCSO, DSWD
and from patients promissory notes.
We noted that amounts per trial balance do not
tally with supporting schedules. Further, we noted
that there are payments reflected in the passbook
but not applied as payment in the subsidiary
ledger/ schedules.

These may rise some effects to the Company

as follows:
Could be an indication of internal control
weakness and inaccuracy of recording

Inflates/deflates
receivable balance

the

aged

accounts

Could cause allowance to be overstated/

understated
Could
cause
payments

underpayment/duplicate

Could misstate the correct amount of

income and receivable balance to be
presented in the Statement of financial
position