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THE AUDITOR’S AUDIT

THE AUDITOR’S AUDIT. Presented by Dave Yuhas Donna Denker and Associates. NATIONAL SINGLE AUDIT SAMPLING PROJECT. Project conducted under sponsorship of : President’s Council on Integrity and Efficiency Executive Council on Integrity and Efficiency Three State Auditors

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THE AUDITOR’S AUDIT

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  1. THE AUDITOR’S AUDIT Presented by Dave Yuhas Donna Denker and Associates

  2. NATIONAL SINGLE AUDIT SAMPLING PROJECT • Project conducted under sponsorship of : • President’s Council on Integrity and Efficiency • Executive Council on Integrity and Efficiency • Three State Auditors • Not all that important. Just interesting to see how many organizations had to be created and involved to get this project completed. • Report issued in June 2007

  3. OBJECTIVE • The Project was performed to: • Determine single audit quality • Provide baseline for monitoring ongoing quality • Recommend needed changes to the process or the Single Audit Act

  4. POPULATION/SAMPLE • Study covered 208 audits out of a total 38,000 single audits performed in 2002/2003 -- 005%. • Breakdown of 208 – The 2 buckets • 96 were from 852 entities expending Federal Awards greater than $50 million. • 112 were from 37,000 entities expending Federal Awards less than $50 million. • Which bucket does your entity fall into?? • 97% audits conducted were on entities receiving less than $50 million -- 37,000 of the 38,000.

  5. OVERALL RESULTS • 115 of 208 acceptable – 48.6% • 115 represented 92.9% of total Federal Awards • Bucket #1 audits for the most part • 30 had significant deficiencies – 16% • 30 represented 2.3% of total Federal Awards • 63 were unacceptable – 35.5% WOW!! • 63 represented 4.8% of total Federal Awards

  6. BUCKET #1 • Total of 96 audits • 61 (63.5%) were acceptable • 12 (12.5%) had significant deficiencies • 23 (24%) were unacceptable • What is this telling us? • Who performs these audits?

  7. BUCKET #2 • Total of 112 audits • 54 (48.2%) were acceptable • 18 (16.1%) had significant deficiencies • 40 (35.7%) were unacceptable • More than half unacceptable! • What would your audit be classified as? • What is more important quality/cost?

  8. DEFICIENCIES Not documenting the understanding of internal controls over compliance requirements -- 56.5% Not documenting the testing of internal controls of at least some compliance requirements – 61% Not documenting compliance testing of at least some compliance requirements – 59.6%

  9. EFFECT/RECOMMENDATIONS • Revised and improved single audit standards, criteria and guidance. • Improve standards/guidance • Suite of 8 plus more! • Established minimum requirements for training on performing single audits • More CPE both as pre-requisite and ongoing. • Review and enhance processes to address unacceptable audits • Possible application of suspension and debarment process • In the end • More procedures = more time • More time = increased audit costs

  10. MESSAGE • Choose your auditor carefully! • RFP should include: • Details • Deadlines • Time • Staff experience • Peer review • References • What is impact on entity if audit is determined to be unacceptable?

  11. QUESTIONS?

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