Laserfiche WebLink
Audit Area Substantive Test <br />Cash and investments — Send bank confirmation forms (completed by management) or <br />initiate electronic confirmations to respective financial <br />institutions, compare confirmed balances to bank statements, <br />and investigate discrepancies. <br />Consider compliance of investments in accordance with State <br />statute and the government's investment policy. <br />Agree book balances to a trial balance account (or group of <br />accounts for pooled cash systems). <br />Test bank reconciliations by tracing deposits in transit and <br />outstanding checks to the subsequent period statement. Trace <br />inter -bank transfers in transit between account reconciliations. <br />Identify outdated or unusual reconciling items. <br />Consider the appropriateness of accrued interest on certificates <br />of deposit and investments. <br />Calculate Federal Depository Insurance Coverage (FDIC). <br />Receivables <br />Inventory <br />Prepaids <br />Obtain subledgers for significant account balances. Select <br />items for detail testing and obtain subsequent receipt noting <br />whether the amount was earned prior to year end and received <br />in the next period. <br />Consider whether any receivables in governmental funds are <br />collected outside of the period of availability (as it is defined <br />by the government) and should be deferred in the fund <br />financial statements. <br />Trace grant receivables to financial status reports, subsequent <br />receipts, and/or determine whether the recorded receivable is <br />equal to grant expenditures, less actual cash receipts. <br />Trace special assessments receivable to signed special <br />assessment rolls. Perform a rollforward of special assessments <br />by taking the prior year receivable, subtracting special <br />assessment revenue from the trial balance or financial <br />statements, adding new assessments levied, and comparing the <br />result to the amount of the current receivable. <br />Compare detailed listings of items, individual cost, and <br />extended cost to the general ledger control accounts. <br />Inquire about obsolete inventory. <br />Determine the nature of prepaid items in each general ledger <br />account. <br />Recalculate prepaid balance using invoices and check <br />vouchers and determine whether the amount was paid prior to <br />year-end. <br />