Financial Management and Analysis of Projects

Table of Contents

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Foreword

1. Introduction to the Guidelines

2. User Instructions

3. Preparing and Appraising Investment Project

4. Financial Management of Executing Agencies

5. Reporting and Auditing

5.1. Financial Reporting and Auditing Overview

5.2. Accounting Standards and Policies

5.3. Financial Reporting

5.4. Auditing Standards and Auditor Engagement

5.5. Reviewing Financial Reports

5.6. Reviewing Auditors' Reports

6. Financial Institutions

7. Knowledge Management

Financial Management and Analysis of Projects

5.1. Financial Reporting and Auditing Overview

5.1.1. This part of the Guidelines addresses the financial reporting by, and auditing of, projects, project EAs, and project implementing agencies (IAs). It also advises on the selection and terms of reference of public and private sector auditors, particularly in relation to the qualifications and competence of government auditors. Arrangements for monitoring and reviewing financial reports and auditors’ reports are explained in detail. A checklist is provided for reviewing auditors’ reports.

5.1.2. Together with Part 3 (Preparing and Appraising Investment Projects) and Part 4 (Financial Management of Executing Agencies), this part aims to: (i) provide financial analysts with detailed guidelines to enable them to advise governments, EAs, and IAs on ADB's financial reporting and auditing requirements; and (ii) facilitate the identification of inadequate financial reporting and auditing performance by EAs, IAs and auditors.

5.1.3. It is based on the Operations Manual (OM), Project Administration Instructions (PAIs), and related guidance documents. Part six of these guidelines provides specific guidance on particular financial reporting and auditing issues for FIs. In addition to this introduction and overview, this part has five sections:

5.2	Accounting Standards and Policies	This section describes accounting standards and their applicability to financial reports on ADB-financed projects.
5.3	Financial Reporting	This section outlines ADB financial reporting requirements for ADB-financed projects.
5.4	Auditing Standards and Auditor Engagement	This section describes auditing standards and their use in the audit of the financial reports of ADB-financed projects.
5.5	Reviewing Financial Reports	Project Administration Instruction 5.09 sets out ADB requirements for monitoring financial reporting. This section discusses the process of reviewing financial reports and outlines actions that should be taken where financial reports are overdue or are inadequate.
5.6	Reviewing Audit Reports	This section provides guidance on reviewing auditor reports. It includes an audit report questionnaire.

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4.4.8. Liquidity Indicators

5.1. Financial Reporting and Auditing Overview

Catalog

5.1. Financial Reporting and Auditing Overview