We obtained background information at the contractor's offices in Washington, DC, and then traveled to the contractor's office in Cairo for 2 weeks of fieldwork. Transactions can be handled quite differently than we would expect. There are few receivables or payables for this reason. Accounting transactions that have future consequences are not necessarily recorded in any records. Advance payments for future services are simply expensed.
Financing is also new in Egypt.
The subcontractor had a financing agreement with a local car dealership for a vehicle, but there was no evidence of an interest rate or amount paid for interest or any charges. Additionally, post-dated checks were provided to the dealership for all future payments. This would certain cause concern to most American auditors. Bank accounts are not reconciled or maintained. Checks are not returned to the originator and cannot be retrieved by the bank for auditor inspection.