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<br />the audit from those charged with governance; and provide those charged with <br />governance timely observations arising from the audit that are relevant to their financial <br />oversight responsibility. <br /> <br />TIMELINE <br />Preliminary audit fieldwork began July 30; followed by this pre-audit meeting, October 8; <br />field work will take three weeks starting November 5; and lastly the presentation to the <br />City Council, on a date to be determined. <br /> <br />Mayor Welsch asked if that schedule was based on when the City’s staff can provide the <br />data that would be needed. Ms. Lenk said yes. The Mayor asked if the City was getting <br />closer to the Charter’s timeline of having the audit done within sixty days of the end of <br />the fiscal year, than when they did their first audit. Ms. Lenk said yes. <br /> <br />REVIEW OF 2012 AUDIT PROCESS <br />Planning would involve a review of internal controls on determining the nature, timing <br />and extent of audit procedures; consideration of fraud risk factors by performing <br />discussions with audit and engagement team members; and finally developing an audit <br />plan. The fieldwork would involve a focus on higher risk areas, regular status updates <br />and partner review. The conclusion would be the presentation to the City Council. <br /> <br />Mr. Crow asked for examples of risk factors. Ms. Lenk said lack of segregation of duties <br />around such areas as payroll and cash receipts. Mr. Crow asked about risk around use <br />of credit cards. Ms. Lenk stated the way they like to handle credit cards is that the entity <br />receives receipts from those using a credit card and match them up when a statement is <br />received or if approved by the supervisor. <br /> <br />Mr. Sharpe asked who receives the status updates. Ms. Lenk said it either goes to the <br />City’s Finance Director, the City Manager or sometimes the Mayor. <br /> <br />AREAS OF AUDIT EMPHASIS <br /> <br /> Cash and investments <br /> <br /> Revenue/receipts and receivables <br /> <br /> Expenditure/disbursements and accounts payable/accruals <br /> <br /> Payroll <br /> <br /> Capital assets <br /> <br /> Debt <br /> <br /> Federal Programs and State Compliance <br /> <br /> Accounting policies, judgments and estimates <br /> <br />REQUIRED COMMUNICATIONS AT THE CONCLUSION OF THE AUDIT <br /> <br /> Significant accounting policies <br /> <br /> Management judgments and accounting estimates <br /> <br /> Significant audit adjustments <br /> <br /> Difficulties encountered in performing audit <br /> <br /> Disagreements with management <br /> <br /> Management consultations with other accountants <br /> <br /> Supplementary information in the audited financial statements. <br /> <br /> <br />2 <br /> <br /> <br />