2015-125B - Laserfiche WebLink

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Phase 2: Primary Fieldwork/Testing Planning/Risk Assessment — In order to design our auditing procedures according to your unique operating environment, we will use various methods to gain an understanding of processes and internal controls. We will use the results of these inquiries and tests to assess risks and to further tailor our governmental audit programs. Our standard planning/risk assessment procedures might include these tests: Procedure Document financial systems Review control activities Walkthroughs Description We will obtain any existing accounting policies and/or procedures manuals to gain and understanding of the operating environment. If no such materials are available, we have a form of basic questions that will guide you through the process of documenting your actual practices. A questionnaire will be provided that describes various typical control activities by transaction class (i.e., cash, accounts receivable, long-term debt, etc.). We will ask you to answer these questions and provide us with any additional information that may be helpful to us in understanding the internal control structure. Based on the responses to these questions, we will determine the 2-3 "key controls" over each transaction type. Once we have an understanding of internal controls and have identified the key controls, we will select a small sample of actual transactions and "walk through" each of the key controls to determine if the controls have been implemented and documented appropriately. The typical areas for which walkthroughs are performed are: cash disbursements, cash receipts, payroll, and general journal entries, though other areas may also be tested at this time. Establish materiality and major Using the reasonably adjusted trial balance, the audit team will funds test the appropriateness of major funds. Materiality will then be calculated by opinion unit. Our substantive tests generally require the audit team to test all individually significant items and, depending on the remaining untested balance, may require sampling the remaining population. Review of board minutes In addition to discussing major activities in the year under audit with management (such as issuance of long-term debt, large capital -related purchases, new programs or services, etc.), we will review minutes from meetings of the Board and any committees. This will allow us to identify significant or unusual events or purchases and revise our planning audit procedures accordingly.