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Audits of Small Governments. Unraveling the Mystery of Auditing. May 7, 2012. Presented by: Debbie Goode, CPA Partner Carr, Riggs & Ingram, LLC, CPA’s and Advisors 215 Baytree Drive Melbourne FL 32940 321-255-0088. Planning Phase. “Exceeding Expectations”. Client Acceptance

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Audits of small governments

Audits of Small Governments

Unraveling the Mystery of Auditing

May 7, 2012

Presented by:

Debbie Goode, CPA

Partner

Carr, Riggs & Ingram, LLC, CPA’s and Advisors

215 Baytree Drive

Melbourne FL 32940

321-255-0088


Planning phase
Planning Phase

“Exceeding Expectations”

Client Acceptance

Review prior Auditor workpapers

Planning meeting with client

Read all relevant documents, including minutes


Planning phase continued
Planning Phase (continued)

“Exceeding Expectations”

Assess internal controls and walkthroughs

Calculate materiality

Assess risk, including fraud risk

Develop audit program

Audit team planning meeting


How is materiality calculated
How is materiality calculated?

“Exceeding Expectations”

Governmental activities, business-type activities by major fund, aggregate discretely presented component units, all aggregately remaining fund info

Planning materiality

Tolerable misstatement

Low risk/high risk by area

Passed AJE’s


Types of audit testing
Types of Audit Testing

“Exceeding Expectations”

Substantive

Internal Control

Compliance

Analytics


Efficient audits
Efficient Audits

“Exceeding Expectations”

Planning meeting

PBC list

Send auditors information in advance

Internal controls documented


Efficient audits continued
Efficient Audits (continued)

“Exceeding Expectations”

Walk-throughs before year end

Fraud confirms

Confirms out before audit fieldwork

Audit fieldwork – auditors in field


Efficient audits continued1
Efficient Audits (continued)

“Exceeding Expectations”

Exit conference with partner involved

Go over financial statement draft/reports/comments

Signed rep letters

Partner presents to Council


Reports issued
Reports Issued

“Exceeding Expectations”

Audit Report

Internal control and compliance

Single Audit internal control and compliance*

Auditor General of Florida requires management letter

*if applicable


Compliance with florida law
Compliance with Florida Law

“Exceeding Expectations”

Level of testing up to auditor.

Bid testing.

Travel and entertainment.

Change annually.


Financial condition assessment
Financial Condition Assessment

“Exceeding Expectations”

Benchmarks against similar size entities – population or revenues.

Looks at five year trends.

Favorable, unfavorable, inconclusive.

If unfavorable > 60%, auditor must report.

Can pull out entities not truly comparable.


Internal controls
Internal Controls

“Exceeding Expectations”

Significant material deficiency

Significant deficiency

Remainder - Management Letter comments


Data collection form
Data Collection Form

“Exceeding Expectations”

If have federal single audit, required.

Must be filed earlier than 30 days after receipt of auditor’s reports or nine months after fiscal year end.


Single audit reports
Single Audit Reports

“Exceeding Expectations”

Schedule of Expenditures of Federal Awards and State Financial Assistance

Internal control and compliance over Federal awards and/or State financial assistance.

Schedule of Findings and Questioned Costs

Summary Schedule of prior year audit findings.

Corrective Action Plan


Single audits federal and state
Single Audits – Federal and State

“Exceeding Expectations”

When do you need one?

$500,000 of expenditures during year

How to identify major programs:

Type A

Type B

ARRA


Single audits federal and state continued
Single Audits – Federal and State (continued)

“Exceeding Expectations”

Must calculate materiality for all major programs.

Must document controls in place and test they are functioning.


Single audits federal and state continued1
Single Audits – Federal and State (continued)

“Exceeding Expectations”

Testing based on CFDA and CSFA

(see Compliance Supplement Matrix –

www.whitehouse.gov/omb/circulars/A133_compliance_supplement2011)

Test for compliance to grant agreement and compliance supplement.


Schedule at a glance
Schedule at a Glance

Tuesday May 8, 2012

10:00 a.m. - 11:40 a.m.  GFOA CAFR Award Program – Linda Dufresne and Sarah Koser

10:00 a.m. - 11:40 a.m.  How to Invest With Fewer Dollars? – Jeff Larson, Linda Senne and Jeffrey Yates

10:00 a.m. - 11:40 a.m.  Strategies to Address Aging Infrastructure – Celine Hyer

10:00 a.m. - 11:40 a.m.  Making Technology Work for You! – Steve Murray and Darrel Thomas

10:00 a.m. - 11:40 a.m.  Debt Affordability & Policies – Mickey Miller


2:00 p.m. - 2:50 p.m.  Statewide Chart of Accounts Project – Elwood McElhaney

2:00 p.m. - 2:50 p.m.  Gimmie A Budget Light Please! – Brenda Raver

2:00 p.m. - 2:50 p.m.  Ethics Review – Peggy McGarrity

2:00 p.m. - 2:50 p.m.  Career Development: Building the Next Finance Director – Mark Fostier, Binh Nguyen, Diane Reichard and Jamie Roberson

2:00 p.m. - 2:50 p.m.  Pension Risk Management and Asset Allocation – Kevin SigRist


3:10 p.m. – 4:50 p.m.  Are You Audit-Ready? – Deborah Garringer and Bill Spinelli

3:10 p.m. – 4:50 p.m.  Fraud, Internal Controls and Segregation of Duties for Small Governments – Angela Balent and C. Michelle Blackstock

3:10 p.m. – 4:50 p.m.  Preserving Your Reserves – Jason Brown

3:10 p.m. – 4:50 p.m.  Yikes! You’ve Been Hacked! – Princessa Brown

3:10 p.m. – 4:50 p.m.  Review of the Dodd-Frank Act – Jim Reilly and Ravi Subbaraya


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