Planning the Audit

• Understand the Debt Exchange Program:

  • Review the memorandum of the Debt Exchange Programme authored by the Minister for Finance.
  • Study similar programs implemented in other countries like Russia, Ecuador, and Greece to gain comparative insights.

• Identify Key Stakeholders:

  • Determine the central institution managing the exchange.
  • Identify the coordinating agencies and committees handling the transaction.
  • Assess the qualifications and expertise of personnel involved in the program.

• Review Regulatory and Legal Framework:

  • Check compliance with relevant domestic and international financial regulations.
  • Evaluate whether the debt exchange aligns with statutory requirements and fiscal policies.

• Assess Risk Factors:

  • Identify risks such as exclusion of intended bondholders, misclassification of bonds, and inaccurate financial reporting.
  • Examine the cost implications for the government and the overall economy.

• Evaluate Control Environment:

  • Review the control measures in place to ensure the credibility of data and records.
  • Assess the financial and operational discipline of the institutions involved.

Executing the Audit

• Interview Key Personnel:

  • Engage with the Minister of Finance, the Governor of the Bank of Ghana, and other key stakeholders.
  • Understand the rationale, methodology, and implementation process of the program.

• Verify Documentation and Compliance:

  • Check agreements, modifications, and legal approvals for the debt exchange.
  • Ensure compliance with all financial reporting standards and government policies.

• Analyze Debt Exchange Transactions:

  • Verify the swap ratios and ensure transparency in bond classification.
  • Conduct sample testing of bonds to confirm their accurate transfer to the new bond list.

• Review Financial Impact:

  • Assess the financial statements to reflect the effect of the debt exchange on government accounts.
  • Review economic analyses of the program’s long-term impact on fiscal stability.

• Assess Risk Management Strategies:

  • Evaluate risk mitigation techniques implemented by the government.
  • Review contingency plans in case of bondholder resistance or non-compliance.

• Finalize the Audit Report:

  • Prepare a comprehensive report with findings, recommendations, and necessary corrective measures.
  • Seek expert opinions where necessary and obtain management representations.
  • Submit the final report for review and approval.