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Steps to Improve Financial and Single Audit Quality

The AICPA Governmental Audit Quality Center has some resources available for auditees to assist you in having a smooth and efficient audit. The Center outlines five steps that you, as an auditee, can take to improve the quality of your audit.

The first step is to ensure that your auditors are properly qualified and have the appropriate skills for your financial statement and/or single audit. When selecting an auditor, make sure to select one that is qualified to perform Yellow Book audits and provides appropriate training to the staff that will be working on your audit. You can even make sure that your auditors are members of organizations such as the Government Audit Quality Center.

The second step is to make sure that your auditors have access to all the financial and program records that they will need. It is important as an auditee that you identify all federal programs for your auditors.

Thirdly, you will want to make sure all key staff personnel are available for the auditors during audit fieldwork. Make sure to communicate to all staff, including those outside the accounting department and make them aware of the audit well in advance.

The fourth step is to be involved in the audit process. Understand what it is your auditors are doing and don’t be afraid to ask questions.

The final step in helping to ensure a good quality audit is to make the most out of the exit process. During the exit meeting, talk to your auditors about the audit opinion and other compliance reports as well as any findings or recommendations that they might have. Working with your auditors will help improve the quality of your audit as well as the quality of your processes and procedures.

Audits help you to obtain assurance about the integrity of your financial statements as well as your programs. Receiving a quality audit will help you fulfill your responsibility to your tax payers, bond holders, creditors and others to provide useful and reliable information.

By Jeffery W. Patterson, CPA

Comments

  1. Chris Cassidy says:

    My not for profit social service org has several Federal awards available. We usually spend from our programs and draw funds down from our awards after the fact. This year we are approaching the $500 K threshold and would like to avoid the added audit cost of an A-133. My question is can the SEFA be prepared using the cash basis even though the normal financials are prepared in accrual basis?

    • admin says:

      Chris –

      Thanks for the question. The SEFA needs to be prepared using the accrual basis of accounting, just as your financial statements are. The Circular A-133 indicates that federal funds are considered to be expended when the expenditure or expense occurs and not when the cash is paid.

      Jeffery W. Patterson, CPA, MBA