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Preparing for an Audit
Presented by: Jordan Zwygart, CPA Zwygart John & Associates, PLLC E-mail: [email protected]
Phone: (208)459-4649
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Questions to answer
u What is an audit is and what isn’t it?
u What is your role in the audit?
u What does the auditor need?
u How does the audit relate to my accounting records?
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What is an audit?
u CPA provides reasonable assurance that there is no material misstatement in the financial statements.
u The objective is to express an opinion on the financial statements as a whole.
u Must be performed by an independent accountant. u CPA must obtain an understanding of the entity’s
internal controls. u CPA uses analytical procedures and inquiry, but also
preforms verification and other procedures to obtain enough appropriate audit evidence to express an opinion.
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What an audit is not
The purpose of an audit is not to…
u “Clean up” your books at the end of the year.
u To fix everything that was done wrong.
u To make your books GAAP
u To find all fraud in the district.
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Do I need one?
u If your total expenditure are over $250,000 you must have an audit every year.
u If your total expenditures are between $150,000 and $250,000 you can do a biannual audit.
u If your total expenditures are less than $150,000 then you do not need an audit.
u Idaho State Statutes Title 67-450B
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What is your role in the audit?
You are responsible for: u Providing accurate accounting records for the
auditor to look at. u Have supporting documents to back up your
numbers. u Have internal controls in place to make sure that
transactions are being recorded correctly. u Know why items were recorded in your accounting
system.
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What does your auditor need?
u All banking accounts should be reconciled to your accounting software before the audit begins. The auditor will want to see the bank reconciliations.
u Keep a list of what your auditor asks for and make a folder on your computer to keep a copy of everything for yourself.
u Have something that supports the numbers that show up on your balance sheet.
u Ask your auditor for a list of items they will want before they come.
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How does the audit relate to my accounting records? u The financial statements are yours, not your auditors.
u The audit should match up with your accounting records.
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Controls
u Controls are the things you do to protect yourself and the District.
u Some Common Controls
u Have a person reconcile the bank statements that cannot sign.
u Have a 2nd or 3rd person review and initial documents
u Bank statements
u Invoices
u Make sure that the Commissioners are involved and reviewing things.
u Bank Statements
u Bank Reconciliation
u Financial Statements
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Other issues
u Independence
u You are responsible for the financial statements.
u Fixed Asset List
u You need to keep a list of fixed assets.
u Year-end Adjustments
u Your trail balance needs to match the audit.