External Finance Audit

We carry out our work in accordance with International Auditing Standards (ISA) and International Financial Reporting Standards (IFRS) applicable to the accounting of the type of company being audited. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.

We will place special emphasis on the development of sales activities to determine their real costs and know if there was a profit or loss in the financial and fiscal period at the end of the same. We will attest to the inventories at the end of each period, supervising them and reviewing the costing criteria for said inventories.

Due to the evidentiary nature and other inherent limitations of an audit, together with the inherent limitations of any accounting and internal control system, there is an unavoidable risk that some material misstatements may remain undiscovered.

We expect full cooperation from the personnel of the audited companies and trust that they will make available to us all records, documentation, and any other information required in connection with our audit.

Balance sheet account audit service:

The work will mainly consist of the following:

1. Review bank account reconciliations.

2. Request from banks confirmations of bank accounts for cash and equivalents, loan balances and interest incurred during the year, details of guarantees, interest rates and maturities.

3. Review the procedures involved in handling cash.

4. Review and analyze the criteria used in the recognition and depreciation of fixed assets.

5. Review raw material, in-process and finished product inventory costs.

6. Review and confirm customer accounts receivable.

7. Review and analyze all contracts and subcontracts in general.

8. Review and monitor physical inventories and participate in determining inventory costs.

9.Review current payable obligations with a maturity of less than one year.

Bank loans, capital and interest.
Obligations with third parties for services or supplies.

10. Review obligations payable in terms of more than one year.

Bank loans, capital and interest.
Any other obligation valid for more than one year.

11. Review labor reserves, if any.

12. Review compliance with the presentation and payment of the ITBMS and the Stamp Tax; sworn and estimated income tax as well as other types of taxes.

13.Review of the structure of the shareholders' assets.

Net investment value, assets minus liabilities.
Surplus from revaluation of fixed assets and their changes.
Surplus (Deficit) due to exchange differences in the value of the currency.
Surplus (deficit) value arising from the excess of income over expenses (expenses over income) of the periods.

Income statement audit service:

The work will mainly consist of the following:

14.Review for each line of income.

Invoiced sales and services.
Other income.

15.Review of the costs of goods sold;

16.Review of operating, administrative and financial expenses:

Human resources

Salaries
Features
Compensation

Administrative and operational expenses

Rentals
Public services
Maintenance of facilities and equipment
Professional services
Other expenses

Financial expenses

Depreciation and amortization of assets
Interest paid on bank debts
Banking services

Issuance of audited financial statements:

It consists of carrying out analytical procedures in accordance with International Auditing Standards (ISA) at the end of the fiscal and financial period with the purpose of preparing and issuing a combined financial statement for which the combination rules established by International Standards will be followed. of Financial Reporting (IFRS). These financial statements can be issued in Spanish and English at the client's request. The most common standards applied are the following:

IFRS 1 Adoption of IFRS for the first time
IFRS 3 Business Combinations

It should be noted that in our evaluation of the accounting principles used by the company, which in this case the activities range from construction and investment, we will be emphasizing the review of the application of the following International Accounting Standards (IAS):

IAS 1 Presentation of financial statements
NIC 2 Inventories
IAS 8 Accounting Policies
IAS 11 Construction Contracts
IAS 12 Income tax
IAS 16 Property, plant and equipment
IAS 18 Ordinary income
IAS 19 Employee benefits
IAS 24 Related Party Information
NIC 28 Investment in Associated Companies
IAS 40 Investment Properties

The objectives of these standards are to prescribe the accounting treatment of generally accepted principles and legal compliance in Panama for the recording of ordinary income and costs related to construction contracts, and activities related to the development of construction projects.

Issuance of letter to management:

At the end of our audit work, attached to the financial statements, we will issue a letter to management with our comments and observations on findings, anomalies and inconsistencies found during our work, the consequences and implications and recommendations of each particular case.