How to Prepare for an Audit Ryan Preston And Chase Lenon Requirements Indiana Code 5-11-1-9 Requires the state examiner to examine all accounts and all financial affairs of every public entity IC 5-11-1-25 sets the School audit schedule as
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Presentation Transcript
01
How to Prepare for an Audit Ryan Preston
And
Chase Lenon<br>
02
Requirements Indiana Code 5-11-1-9
Requires the state examiner to examine all accounts and all financial affairs of every public entity
IC 5-11-1-25 sets the School audit schedule as Biennial
Federal Grant Agreements
Grant Agreements commonly call for an annual audit, but Indiana Schools are generally exempt because of a Grandfather clause from 1986
Debt Covenants and Bond Rating Agencies
Most financial institutions and bond rating agencies accept the SBOA audit report for their purposes<br>
03
Types of Engagements Single Audit
Required for Schools that exceed the threshold of federal grant expenditures
Financial Statement Audits
Required for Schools that have outstanding debt
Compliance
Required for ECAs where we have determined specific compliance needs to be reviewed, or are assessed a High risk level
Centralized Compliance
Required for ECAs that are assessed at a Moderate or Low level of risk
Special Investigation
Required for Schools in which the SBOA had determined a need to review specific areas for a specific time period<br>
04
Goals Provide Reader Opinions on Information Presented by Auditee
Provide Reader with Noncompliance of Federal Requirements for Major Programs and State Requirements
Provide Management with less Significant Noncompliance of Federal and State Requirements<br>
05
Entrance Conference Examiners should explain objective of engagement.
Testing for non-compliance, obtaining assurance if applicable…
Explanation of Management’s responsibilities
Informing management of fees, records to be requested, estimated timeline of engagement…
Please ask any questions if you are not clear on anything the examiner provides or requires!<br>
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Financial Statements FE will present the fiscal officer with the compiled financial statements, notes to financial statements, and Schedule of Federal Expenditures
FE will request fiscal officer to review and complete the Form 13<br>
07
Understanding the Unit FEs will inquire or investigate the key employees in conducting the school financial functions
FEs will determine the general environment the school is existing in and what procedures and processes are in place that allow the School to operate
Unit could be asked to complete/update an SBOA Form 7 questionnaire<br>
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Identify Risks Risks Associated with Significant Audit Areas
How Unit has Addressed Risks
How it Will Effect Audit Procedures Performed<br>
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Testing Internal Controls
Policies and Procedures that have been instituted will be tested to ensure that they are sufficient and are working
Substantive
FEs will perform audit steps to determine if financial statement information is materially correct<br>
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Federal Program Audits Schedule of Federal Expenditures
Information input into Gateway Annual Financial report
Selection of Major Programs
Based on dollar amount threshold and Risk Based Assessment
Audit of Major Programs
Audit procedures performed to determine compliance with federal grant requirements<br>
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Subsequent Events What has Happened After the Audit Period?
Debt Issuance
Significant Change in Financial Situation
Consolidation<br>
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Concluding Fieldwork Determine Opinions
Compile Findings and Audit Results and Comments
Request Auditee prepared schedules
Status of Prior Audit Findings
Compile Management Letter Comments<br>
13
Exit Conference Who is Invited
What is Discussed
Request Auditee prepared schedules
Federal Findings Corrective Action Plans
Options to Respond
IC 5-11-5-1.5
State Corrective Action Plans for all repeat federal findings and repeat Audit Results and Comments<br>
14
What Not To Do Panic!
Try to hide things –we are here to help!
The auditor should be viewed as a resource, not an adversary.
Be afraid to ask questions.
Try not to look at an audit as something to complicate your life!
An audit is a irreplaceable tool to ensure your finances are in order.<br>
