WHAT DO WE KNOW ABOUT AUDITORS?

• Scary / Intimidating

• Boring

• Great with Numbers

• Government Agency

WHY DO WE NEED AN AUDIT?

• Foreign School Audit Guide - September 2002

• Amendment to the guide - August 2003

• Amendment to the guide - August 2005

FOUR SECTIONS TO THE AUDIT GUIDE

• General Requirements

• Financial Audit

• Standard Compliance Engagement

• Alternate Compliance Engagement

FINANCIAL AUDIT REQUIREMENTS

• < US$500,000: No Financial Audit required

• US$500,000 – US$3,000,000: home country GAAP annually

• US$3,000,000 – US$10,000,000: home country GAAP

annually with U.S. GAAP every 3 years

• > US$10,000,000: U.S. GAAP annually

COMPLIANCE AUDIT REQUIREMENTS

• if > US$500,000 Certified must perform a Standard

Compliance Engagement

• if < US$500,000 Certified must perform an Alternate

Compliance Engagement

STANDARD COMPLIANCE ENGAGEMENT

• Management Assertions• Internal Control Over Compliance• Follow-up on Prior Audit Findings• School Eligibility• Student Status Confirmation Reporting• Student Eligibility• Processing Loans• Counselling• Return of Title IV Funds• Administrative capability

ALTERNATE COMPLIANCE ENGAGEMENT

• Management Assertions

• Enrolment and attendance

• Loan amounts

• Return of Title IV Funds

• Administrative capability

FINAL REPORTING PACKAGES

• Compliance with the Specified Requirements

• Report on Internal Control Over Compliance

• Schedule of Findings and Questioned Costs

• Comments on the Resolution of Prior Audit Findings

• Report and comment on Final Audit Determination letter

CORRECTIVE ACTION PLAN

• Comments on Findings and Recommendations

• Actions Taken or Planned

• Status of Corrective Actions on Prior Findings

MOVING BETWEEN ENGAGEMENTS

• New Management Representation Letter

• Prior Year Findings must be reviewed

• Different testing and information required

• Different audit under Australian Auditing Standards

COMMON AUDIT FINDINGS

• 2013 Year findings – Standard/Alternate

• Final Audit Determination Letters

• Single Point of Failure

COMMON AUDIT FINDINGS

COMMON AUDIT FINDINGS

• SSCR – Timeliness:

• Documented Policies

• SSCR Batch Dates

• Loan Processing:

• Student Bank Details – Pro-Active

• Good Communication with processing Department

COMMON AUDIT FINDINGS

Alternate Engagement

COMMON AUDIT FINDINGS

• SSCR – Accuracy

• NSLDS Reporting Guide – Appendix C ‘Enrollment Status

Codes’

FINAL AUDIT DETERMINATION LETTERS

• Deficient = Final Audit Determination Letter

• Non-Deficient = NO Final Audit Determination Letter

• Satisfactory Corrective Action Plan (CAP)

SINGLE POINT OF FAILURE

• Establish review policies

• Shared knowledge of the program

• Adequate Training

AUSTRALIAN AUDITING STANDARDS

• ASAE 3100 “Compliance Engagements”

• ASRS 4400 “Agreed-upon Assurance Procedures to Report

Factual Findings"

RISK BASED AUDITS…

Planning, planning, planning!

“If I had 6 hours to chop down a tree, I’d spend the first four

hours sharpening the axe”

Abraham Lincoln

WHAT ARE THE REQUIREMENTS?

• Planning, including an overall risk assessment

• Gain an understanding of the entity

• Consider materiality and engagement risk

• Obtain sufficient and appropriate audit evidence

• Obtain written representations from management

• Communicate deficiencies in internal control

• Communicate breaches to the legislation

• Compliance Report or Report on Factual Findings

THANKS FOR YOUR ATTENTION!

From the team at