MERCADO, CALDERON, JARAVATA & CO.

,
Performed by: Alyssa
CERTIFIED PUBLIC ACCOUNTANTS
Questionnaire 2

Date: 3/20/14

Answers
7.1.
Inquire generally into the procedures
adopted by the company in the preparation
of the financial statements. In doing so,
obtain answers to the following questions to
assist us in obtaining an understanding of
the manner in which transactions are
recorded, classified and summarized for the
purposes of preparing the interim financial
report. A negative answer to any of the
questions may indicate a weakness in the
internal control system relating to the
preparation of the year-end financial report
which may require performing additional
procedures.
a. Is the clients accounting system for the
preparation of the year-end financial
statements adequately documented
and/or communicated, and does it
appear to provide a reasonable basis for
the preparation of the interim financial
report?

Yes. The VP for Accounting

(Chief Accountant)
prepares monthly and
quarterly financial reports
as required by the
government regulatory
bodies. The same is being
checked by the VP Finance
before submitted to the
agencies. They also have
internal auditor who
conducts regular audits.

b. Is the year-end financial statement

report reviewed and approved by a
responsible official of the client other
than the one who prepare?

Yes. The VP for Finance

reviews the financial
statements made by the
VP Accounting (Chief
Accountant)

c. Is the year-end financial report checked

for arithmetic accuracy?

Yes.

d. Are there sales, purchases, and

expenses cut-off procedures, including
procedures for recognition of income or

Yes. These items are

regularly checked by

MERCADO, CALDERON, JARAVATA & CO.,

Performed by: Alyssa
CERTIFIED PUBLIC ACCOUNTANTS
Questionnaire 2

Date: 3/20/14

loss?

the internal auditors.

e. Are year-end adjustments of a normal

recurring nature?

Yes.

f.

Yes.

Are debtors reviewed for collectibles as

at year-end?

g. In the absence of the physical stock

count, does the clients method of
determining the stocks and cost of sales
at interim date appear satisfactory in
respect of the following situations:
1. If stocks and cost of sales are
determine using the same cost
system as used for the preparation of
annual financial statements, has the
system produced reliable information
in the past?

Yes. Data sheets are being

updated regularly.

2. If perpetual stocks records are

maintained, have their accuracy been
substantiated by the through periodic
comparison with actual quantities on
hand?

Yes. Actual physical counts

are done as directed by
the management.

3. If gross profit margins are used, are

different margins used (as
appropriate) for different product
lines?

N/A

h. Are stocks reviewed for excess

quantities, obsolescence, and net
realizable value as at year-end?

N/A

i.

Are provisions, other than for stocks

debtors, reviewed for adequacy at the
interim reporting date?

Yes.

j.

Are prepaid and deferred accounts

adjusted at the interim reporting date?

Yes.

k. Are recoverability deferred tax assets

reviewed as at year-end?

Yes. Deferred tax assets

are adjusted at year

MERCADO, CALDERON, JARAVATA & CO.,

Performed by: Alyssa
CERTIFIED PUBLIC ACCOUNTANTS
Questionnaire 2

Date: 3/20/14
end.

Ms. Elizabeth T. Morales

Assistant Vice-President/Chief Accountant