preparing for the perfect audit · 2019. 10. 18. · completing this course, you will be able to:...
TRANSCRIPT
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Preparing for the Perfect AuditMaurine Wahlen & Robyn KajiuraBeyond the Bottom Line, San Antonio, Texas
March 2015
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Preparing for the Perfect AuditCourse summary The purpose of this course is to provide a basic overview of how to prepare for a financial statement audit and the various roles played by management, audit committee, governing body, and auditor.
Learning objectives - After completing this course, you will be able to: Describe how roles impact your definition of a
“Perfect Audit.” Identify the team members involved in preparing
for an audit.
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Preparing for the Perfect AuditLearning objectives continued - After completing this course, you will be able to: Illustrate how audit preparation is a year-round
process. Describe the importance of communication in
preparing for the audit – within the organization, with the audit committee, and with the auditor.
Apply the audit process timeline and delegate responsibilities between management, the auditor, and the audit committee.
List the best practices, tools, and resources for audit preparation.
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What is a perfect audit?
The answer to this question may vary depending on your role(s): VP Finance/Treasurer Governing Committee/Board Audit Committee Auditor
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What is a perfect audit?
VP Finance/Treasurer definition: Less stress - convenient time and
minimal interruptions Increase confidence of my board
members Provide help where I need it Efficient audit with minimal cost Audit reports released on time
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What is a perfect audit?
Governing Body definition: Big picture “strategic” oversight Don’t need all the details Timely reports Increase confidence in management “Is everything ok?” or “What should I
worry about?”
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What is a perfect audit?
Audit Committee definition: Audit must provide the information
needed to enable the committee to perform their function
Cost effective audit Timely reports
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What is a perfect audit?
Auditor’s definition: Audit is done on time Audit is within budget Audit performance and reports comply
with professional standards Opportunity to provide help Everyone is happy!
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The key to “A Perfect Audit” is Preparation and Communication!
Before the audit
During the audit
After the audit
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Who needs to be on the audit preparation team?
Think about the audit process What do you need to know? Who can provide the information? Make them part of your team!
Proactive Communication!
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Who needs to be on the audit preparation team?
Treasury Secretariat Registrar IT personnel Board/audit review
committee Attorney/legal
counsel
Maintenance personnel
Youth camp, dorm or cafe manager
Building contractor Division personnel Local church
treasurer
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How do we prepare?
It happens all year long!
Year-end closing procedures
Scheduling the audit
Audit preparation list
Proofing financial statements
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How do we prepare?
Audit preparation list– Conference– Academy
Resources Delegation Best practices …
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How do we prepare?
Communication
– Within the organization
– With the Audit Committee
– With the auditor
Deadlines & follow up
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How do we prepare?
Understand the Audit Process Know what the auditor needs Understand the audit timeline Know what to expect during planning,
audit fieldwork and after the auditor leaves your office
Understand your responsibilities in the audit report release process
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AGREE
Develop and agree on written terms of engagement with the client
OBTAIN
Obtain information about client’s accounting and financial reporting system
PERFORM
Design and perform audit procedures based on assessed risk of material misstatement
CONCLUDE
Analyze results, draw conclusions, and form an opinion about the financial statement
REPORT
Prepare and issue audit opinion and other communications to prescribed recipients
ASSESS
Assess the risk of material misstatement, whether due to error or fraud
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6 months before audit Prior to client’s fiscal year-end
Audit preparation list and sample documents provided to client (via binder, Portal, or email)
Maximum of 90 days after close of financial year
2 weeks prior to On-site Time
2 weeks prior to On-site Time
Discuss audit schedule
Sign and return engagement letter
Auditor responsibility Client responsibility
Schedule the audit Send engagement letter Provide core policy
assertion letter template
1 month prior to On-site Time
Audit preparation items provided to auditor
Sign & return policy assertions on letterhead
Review files for completeness
Respond to auditor queries
Review client documents Determine if client is
ready OR Consider need to
withdraw
Sign accounting agreement if needed
Discuss accounting services if needed OR Start withdraw
process and required communication
Finalize all financial transactions
Prepare financial statements per SDA Accounting Manual
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2 weeks prior to On-site Time
1-2 weeks prior to On-site Time
Audit On-site Time
End of On-site Time– if pending audit issues
Engagement Extension -maximum 30 days
Audit committee chair & treasurer available for consultation
Auditor responsibility Client responsibility
Audit planning and risk assessment performed
End of On-site Time– if all audit issues resolved
Officers available for Entrance meeting
Treasury team available for queries
Treasurer and treasury team available for questions
Audit procedures at client office
Work on audit procedures at auditor’s office
Audit status meeting Sign audit extension
Audit status meeting – discuss pending items and deadlines Prepare engagement
extension letter
Provide documentation as needed for pending items
Auditor resolution of pending/open items
Exit interview
Exit interview(if no pending items) Close of
Engagement (COE)
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Close of Audit Extension From COE to a maximum of 53 days
From COE to a maximum of 53 days
No later than 60 days after COE
No later than 60 days after audit report release
Provide report to audit committee
Provide auditor with responses to findings shared with audit committee
Exit Interview
Auditor responsibility Client responsibility
Exit Interview(all outstanding issues resolved) Close of
Engagement (COE)
Week after Draft release
Draft report released to officers Draft letter for
Representation & Release provided to officers for signature
Respond to audit inquiries as needed
Prepare audit reports Audit Quality review Report approval Auditor follow up
Sign and date Representation & Release letter
Audit report released to management and chair of audit committee
Client reviews draft report
Contact auditor with any questions
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Audit Committee & Chair
Subcommittee of Governing Committee or Board
Meet at least annually Committee Charter (terms of reference)
as outlined in policy Responsibilities during the year Responsibilities before, during and after
the audit
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What are my resources?
NAD Treasury– SDA Accounting Manual– Remuneration Scale/Book– Model forms
www.nadadventist.org/treasuryresourcesNAD Secretariat
www.nadsecretariat.org
http://www.nadadventist.org/treasuryresourceshttp://www.nadsecretariat.org/
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What are my resources?
Financial Accounting Standards Boardwww.fasb.org
AICPAwww.aicpa.orgBoard Source
“Community Resources”www.boardsource.org/
http://www.fasb.org/st/http://www.aicpa.org/http://www.boardsource.org/
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Who are my resources?
Your Auditor
Others …
Who’s on your team?
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Thank you!
Questions?Maurine [email protected]
Robyn [email protected]
Reminders: Turn in your
evaluation Sign attendance
sheet for CPE
mailto:[email protected]:[email protected]
Preparing for the Perfect AuditPreparing for the Perfect AuditPreparing for the Perfect AuditSlide Number 4What is a perfect audit?�What is a perfect audit?What is a perfect audit?What is a perfect audit?The key to “A Perfect Audit” is Preparation and Communication!Who needs to be on the audit preparation team?Who needs to be on the audit preparation team?How do we prepare?How do we prepare?How do we prepare?How do we prepare?Our Audit ProcessAudit PreparationAudit PerformanceAudit ReportingAudit Committee & ChairWhat are my resources?What are my resources?Who are my resources?Thank you!