Audit & Tax

An audit, whether conducted by an internal or external auditor, will typically consist of the following steps. The term “client” usually means the management of the department or activity being audited.

1. Planning: the auditor will gather and review background information about the client’s activity, determine the audit scope and objectives, and develop an audit program identifying the issues to be examined, questions to be asked, and documents to be reviewed.
   
   
2. Entrance Conference: the auditor meets with management to discuss the audit objectives, approximate time schedules, types of auditing tests, and how the audit results will be communicated.
   
   
3. Fieldwork: the auditor visits campus departments to interview key personnel and evaluate whether adequate internal control processes are in place, documented, and are being followed. This will usually include transaction testing to verify that established policies and procedures are actually being followed.
   
   
4. Analysis — Determination of Results: as deficiencies or “opportunities for improvement” are identified, the auditor will bring them to the client’s attention. At the end of fieldwork, the auditor usually reviews all preliminary observations and findings with the client at an informal exit conference.
   
   
5. Draft Report — Exit Conference: the auditor writes a draft audit report, identifying problems detected and making recommendations for improving operations, and forwards report to the university for review. The auditor meets with the management at a formal exit conference to discuss the draft audit report and to resolve any disagreements.
   
   
6. Campus Response: the auditor issues a final draft report and the university must submit a written response for each recommendation, within 30 days. The university is expected to concur with each recommendation and provide a corrective action plan, including an estimated date of completion.
   
   
7. Audit Report: the auditor issues the final audit report.
   
   
8. Follow-up: generally, the auditor will conduct a follow-up to ensure implementation of recommendations.