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Keeping Your Audit Costs Down

. Keeping Your Audit Costs Down Presented By: W. Andrew Powell, CPA Principal Halt, Buzas

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Keeping Your Audit Costs Down

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    1. Keeping Your Audit Costs Down

    2. Keeping Your Audit Costs Down Presented By: W. Andrew Powell, CPA Principal Halt, Buzas & Powell, Ltd.

    3. Introduction What does an audit really mean Do you need an audit Who hires the auditor Request for proposal Engagement Letter Audit timeline Auditors information request

    4. Is an audit required? Governmental funding Donors State charitable registration Paid fundraiser Board of Directors Other types of service Compilation Review Agreed upon procedures Program specific services

    5. What is an Audit Process for testing the accuracy and completeness of information Allows a CPA to issue an opinion Includes: Cover letter signed by the auditor Financial statements Notes to the financial statements

    6. Who hires the auditor? Staff Executive Director Audit committee Board of Directors

    7. Request for Proposal Information the Organization should include: Background of the organization Services to be performed Personnel to contact for more information Timing for completion Prior financial statements and management letter Responses from CPA firms should include: Experience with not-for-profit organizations Experience with related entities Staff continuity and turnover experience Identify the engagement team Audit approach Fee Standard billing rates References Differences from competition

    8. Engagement Letter Scope of work Timetable Estimate of fees Process for change in scope of work Payment terms Assistance to be provided by organization personnel

    9. Audit Timeline Schedule interim procedures Completion of confirmations Develop list of schedules for preparation Provide examples of schedules Schedule year end fieldwork Date for providing drafts Financial statements Management letter Communication with audit committee Process for approval of audit

    10. Auditors information request Information usually requested Trial balance Schedules to support all balance sheet accounts Copies of contracts Legal representation letters Fundraising appeals Grant documentation Restricted contribution documentation Sample of cash receipts and disbursements

    11. Audit Assistance Requested schedules not prepared Search for unrecorded liabilities Expense accruals Amounts released from restriction Adjustments Organization Auditor Proposed Waived

    12. Dos and Donts Dos Engagement letter Provide requested schedules in advance Receive daily updates on progress Provide in writing required date of completion Ask what services would be considered above audit scope Request an exit conference

    13. Ways to Reduce Audit Costs Request a multi-year price quote Prepare your own financial statements Prepare your own footnotes Prepare all audit schedules Provide key personnel for questions Maintain a file with copies of important documents: Board of director minutes Leases Notes Accounting issues Contributions restricted vs. unrestricted Organizations policies and procedures Adjusting entries Functional allocation last step

    14. Questions and Answers

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