Transcript HOW TO PREPARE FOR AN AUDIT - Florida Atlantic University

HOW TO PREPARE FOR AN
AUDIT
Presented by Financial Affairs
2008
Be Prepared for the Audit
• An audit does
not have to hit
like a bolt of
lightning ...
Types of Audits
• State Audits - conducted by the Florida’s
Auditor General’s Office
• Internal Audits - conducted by FAU’s
Inspector General Office
• External Audits - performed by a CPA
firm
• Federal Audits – performed by a Federal
agency
What/Who Dictates Compliance?
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Federal & State Statutes
Granting Agencies Policies
Florida Administrative Code
Board Of Trustee Policies
Presidential Memorandums
Department Polices & Procedures
Department’s Policies &
Procedures
• Are there written policies &
procedures? (If not, GET
SOME!)
• Are they current?
• Have they been given to
employees?
• Are they being followed?
Documentation
• If you don’t have documentation, you
have nothing! 
• Any deviation from the ordinary or from
the written procedures must be
documented.
• Documentation helps to prove why you
did what you did and were aware of the
exception.
Document It!
• Did you verify an action or review an
employee’s work?
– Initial & Date
• Were you unable to follow a policy?
– Note reason, initial & date
Document It!
• Did you make a phone call?
– Note who, when & what
• Did you send an e-mail, fax or
letter?
– Keep a copy.
Separation of Duties
• Authorization
• Custody of Assets
• Record-Keeping
The more negotiable the
asset, the greater the
need for separation of
duties
Separation of Duties
• Duties are considered
incompatible if someone can carry out and
conceal an error or an
irregularity during the
course of day-to-day
activities.
Separation of Duties
• The primary purpose is to prevent and
promptly detect errors or irregularities.
• They should provide a cross check
Separation of Duties
• AUTHORIZATION
– This refers to the person that can approve
the transaction or any exceptions.
– In the case of a small operation, this duty
may be assigned to a supervisor.
Separation of Duties
• CUSTODY OF ASSETS
– Assets are not just cash and
checks, but equipment, files
and records.
Separation of Duties
• RECORD-KEEPING
– Relates to additions, deletions and changes
in all records - cash receipts, accounts
receivable, Banner records, etc.
Useful Tips
• Periodically have an “independent”
review of operations and procedures document the review.
• Make use of checklists and logs to
document procedures
• Cost/Benefit/Risk analysis
Audit Responses
• Keep responses brief
• Address the issues and only the issues
• Not the place for excuses, reasons,
explanations or attachments
• Do not go into detail about implementing
recommendation
KEEP IT SIMPLE & REALISTIC!
Implementation
• Do what you said you would
do by the date you said you
would!
• If this is not possible,
document the issues.
They will check!
Help is Available
• The Inspector General’s Web Page has
links to several useful sites, including
booklets on...
...internal controls
...separation of duties
...surviving an audit
www.fau.edu/admin/oig/
The End
Financial Affairs at Florida Atlantic University
Thank you!