What to Expect During an Audit
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GA guided tour of the financial statement audit process from selecting an audit firm to preparing for the audit to executing the audit and follow up afterwards.
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What to Expect During an Audit
- 1. Sponsored by: What to Expect During an Audit Paul Konigstein May 29, 2013 Twitter Hashtag - #npweb Part Of:
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- 8. What to Expect from an Audit Nonprofit Webinars Paul Konigstein Senior Consultant
- 9. BENEFITS OF AN AUDIT 9 • Assurance that financial statements are accurate • Advice on making financial processes more effective and efficient • Advice on improving financial controls • Donor requirement • Transparency
- 10. DEFINITION au·dit noun ˈȯ-dət a methodical examination and review Middle English, from Latin auditus act of hearing From the same root: audition • Source: Merriam-Webster 10
- 11. TYPES OF AUDITS • Financial Statement Audit (most common) • Forensic Audit • Desk Audit • Agreed Upon Procedures Audit • Compliance Audit • Program Audit 11
- 12. SELECTING AN AUDITOR • Strong knowledge of not for profit accounting AND your business model • Expertise in type of audit required • Demonstrated interest in your organization • Technologically savvy • Location of offices • Fee 12
- 13. ENGAGEMENT LETTER • Services to be performed aka scope of work • Itemized fee for services • Manager to be assigned • Timeline 13
- 14. PROVIDED BY CLIENT (PBC) LIST • Documents • Organizational • Transactional • Reports from Accounting Software • Trial balance • Financial statements • Analysis (Schedules) • Confirmations 14
- 16. GETTING THE BOOKS IN SHAPE • Clear the clearing accounts • Make sure accounts have proper balances • Reverse last year’s accruals • Enter this year’s accruals 16
- 17. FIELDWORK • Institutional documents • Sample of: • Deposits • Paid invoices • Payroll register, personnel file, and time sheets • Billing • Fixed assets • Journal entries 17
- 18. FIELDWORK • Interviews with key staff • Documentation of policies and procedures • Fraud control questionnaire 18
- 19. WHAT AUDITORS LOOK FOR • Transactions approved • Transactions in proper time period • Transactions properly classified and allocated • Accruals done properly 19
- 20. WHAT ELSE AUDITORS LOOK FOR • Existence of control policies and procedures • Policies and procedures followed • Verification of transaction occurrence • Reasonable basis for assumptions • Compliance with laws and regulations 20
- 21. A-133 AUDIT • Audit of US government grant activity • Threshold of $500,000 (for now) • Schedule of Federal grant expenditures • Focus on time records • Integrated with financial statement audit • Public disclosure 21
- 22. OUTCOMES • Financial statements • Unqualified vs. qualified opinion • Material weakness and significant deficiency • Management letter • Representation letter 22
- 23. QUESTIONS? 23
- 24. CONTACT INFORMATION Paul Konigstein Senior Consultant Accounting Management Solutions, Inc. pkonigstein@amsolutions.net 516-270-5070 www.amsolutions.net 24
- 25. Sponsored by: Upcoming Webinars Dates Topic 6/4 A New Era in Nonprofit Marketing 6/5 Leadership Engagement as an Operations Strategy 6/5 Crowdfunding: Not just for first-world problems 6/11 Telling the Right Story for Your Online Campaign 6/12 The Case for Integrated Planning 6/12 To Raise More Money, Tell A Story Register at NonprofitWebinars.com Part Of:
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