BKR Garcia & Co. - Laserfiche WebLink

Home Browse Search

I I I SECTION VI.S - REQUIREMENTS OF THE TECHNICAL PROPOSAL (Colltilllled) 8. SPECIFIC AUDIT APPROACH (Co/1ti/1l1ed) INTERNAL CONTROLS (Continued) I We have found through our experience that there are two primary methods to test controls. Documented controls - Tested by reviewing a sample of transactions for evidence that the control was being performed. y Undocumented controls - Tested through inquiry and observation procedures with appropriate department personnel. I I LAWS AND REGULATIONS I Statement on Auditing Standards from the American Institute of Certified Public Accountants, establishes standards for testing and reporting on compliance with laws and regulations. In all financial statement audits, the auditor must consider laws and regulations that have a direct and material effect on the financial statements. Further, the auditor designs audit procedures to provide reasonable assurance that the financial statements are free of material misstatements resulting from violations of these laws and regulations that have a direct and material impact on the financial statements. For governmental entities, this requirement is even more important given the variety of legal and contractual considerations typical of the government environment. I I Identifying applicable laws and regulations is fundamental to fulfilling the responsibility of understanding their effects. We will obtain this knowledge through the following sources: ;... Discussion of compliance requirements with the City officials, including legal counsel. ;... Identification of compliance matters in statutes, financial ordinances, City policies, contracts, grants and debt agreements. y Review of City Commission meeting minutes. Inquiries of the program administrator of the governmental entities that provided grants about restrictions, limitations, terms and conditions under which such grants were provided including review of the OMB Circular A-133 Compliance Supplement and the Florida Single Audit Act. ;... Our existing knowledge of federal and state laws. I I I I AUDIT SAMPLES FOR TESTS OF COMPLIANCE I I Tests of compliance with laws and regulations are included with the tests of transactions and controls, when practical. Additional samples are sometimes necessary to test specific laws and regulations. Sample sizes for compliance testing are determined based on the number of transactions and the significance of the requirement. I I I I .J~R~.~~ 36