2005-274 - Laserfiche WebLink

Home Browse Search

iiiiiiiiiiiiiiiiiiii iiiiiiiiii ON III III Commitment to Quality Service Audit Approach Internal Control Systems - (Continued) To assist us in identifying specific areas subject to audit testing, we will use practice aids developed by the FICPA (Compliance Auditing in Florida) , the Office of Management and Budget (Compliance Supplement for Single Audits of State and Local Governments) , and from information obtained from reviewing applicable Florida statutes . Typically, we will test for compliance with applicable laws and regulations simultaneously with testing for compliance with specific internal control systems to efficiently detect all potential problems in advance of our detailed testing procedures . These procedures are initially employed to assess the risk of relying on existing internal control systems and related procedures to determine the extent of substantive testing done after the balance sheet date . Additional procedures generally include testing for compliance with specific and general conditions associated with any federal and/or state financial assistance programs to enable us to express assurance on the control systems and program compliance , as applicable . The results of these tests are used to update our documented understanding of your internal control systems and to identify specific areas of your overall control environment which require additional audit attention . It is also our policy to communicate the results of our compliance testing to your management on a timely basis as we note them so that corrective actions can be implemented, if necessary, prior to the end of the audit engagement. Statistical Sampling Statistical sampling will be used in all aspects of the testing phase , utilizing tailored audit programs . We will conduct tests to ascertain that the significant strengths within the system are functioning as described to us . Transactions will be selected and reviewed in sufficient detail to permit us to formulate conclusions regarding compliance with control procedures . Additional tests will be designed to provide reasonable assurance as to the validity of the information produced by the accounting system. The firm has developed sample size guidelines for all samples performed in order to form an opinion on the financial statements under generally accepted auditing standards and Government Auditing Standards . The objective of the guidelines is to improve the quality of sampling by : • Relating sample sizes more directly with factors that influence sample size . • Reducing inexplicable sample size variability . • Encouraging the use of statistical sampling . Structured procedures , which give appropriate recognition to factors such as reliance on internal control , nature and timing of audit procedures, size of the organization, dollar total of population being sampled, and sampling error, are used to effectively determine audit samples and evaluate the results of the procedures performed . In addition to our tests of internal controls , we use these procedures to determine the sample size for fixed asset additions/dispositions , cash disbursements, accounts receivable , inventory, accounts payable , and compliance . Sample size will vary based on materiality and the population being tested . The extent to which we apply detailed audit procedures and sampling is based on materiality, our evaluation of audit risks and internal accounting control , and the characteristics of items comprising the account balances or class of transactions . 35