Effective Tips in Answering Audit Observation Memorandum (AOM)/Audit Findings

1. State the Facts and Support them with Evidence.

What makes an auditor question a financial transaction is when it is not supported with complete and appropriate documents. Hence, they flag transactions such as these by issuing an AOM. So when you receive AOM in this nature, it is best to respond to it by stating the facts and supporting it with evidence by submitting the required documents.

To avoid this and prevent the same from happening again, it’s best to always support your expenditures with facts, and complete and appropriate documents. For some agencies they prepare Checklists of Documentary Requirements for each of their transactions.

2. Support your answer with Legal Bases.

This is a common cause of AOM which, most often than not, especially when the Agency cannot support the same with appropriate legal bases, results to suspension and disallowance of the expenditure. To this reason, always ensure that before you spend on something, there must be a legal basis for the same.

However, be also careful with the legal basis you use as not all legal basis are acceptable. For instance, most LGUs assume that an appriation ordinance can be used as a legal basis. Although it can be used as one, the AO must also conform with other laws, rules, and regulations. The same is likewise true to national government agencies. The Accountant and Budget Officer must also be careful in using legal basis as there are rules and regulations that are dependent from each other.

So in answering your AOM, make sure that you support it with sufficient legal basis and logical reasoning.

3. Answer only what is being asked and avoid providing ambiguous information that would stem another AOM.

This is self-explanatory. Do not provide information that are not relevant to the case at hand. Less is more. More is less. The more you say things, all the more you may commit mistakes. Thus, it is best to always answer straight to the point.

4. It pays to clarify unclear portions of the AOM with the issuing Auditor.

Don’t commit a mistake of answering a question that is not being asked by the Auditor that may result to the issuance of a clarificatory AOM. You don’t want to be put in a situation where your Auditor thinks ‘di ka nakakaintindi’.

To avoid this, it’s wise to discuss first with the Auditor the gray areas of the AOM before answering the same. This will also an opportunity for you to understand the AOM better so you can answer it effectively. It’s also a good chance to catch what the Auditor wants and what he/she actually requires. This may save you time later on.

5. Be sincere with your answer.

Remember that your Auditors are also human beings. They can feel the sincerity of your response to the AOM. When the nature of the AOM is just calling the attention of the Agency to abide and conform with rules and regulations, which the Agency may not be aware of, it’s best to tell the Auditor the reason for not conforming, admit errors if necessary, and assure the Auditor that it will not happen again.

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Got other tips in answering AOMs? Share them in the comment section.

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