The Audit Process

Chapter 9

Presented by Jessica C Smith, ManagerKPMG LLP

KPMG LLP

2

May 2008 GAAP Reporting Workshop

© 2

00

8 K

PM

G L

LP,

the U

.S.

mem

ber

firm

of

KPM

G In

tern

ati

on

al, a

Sw

iss

coop

era

tive.

All

rig

hts

rese

rved

. Pri

nte

d in

U.S

.A.

KPM

G a

nd

th

e K

PM

G log

o a

re r

eg

iste

red

tra

dem

ark

s of

KPM

G In

tern

ati

on

al.

Overview – The Audit Process

Role of the auditor

Role of the campus

Planning and communication

Campus preparedness – having all required items ready on first day of fieldwork!

Directly impacts the ability to stay “on track” with required audit timeline and CO submission deadlines

3

May 2008 GAAP Reporting Workshop

© 2

00

8 K

PM

G L

LP,

the U

.S.

mem

ber

firm

of

KPM

G In

tern

ati

on

al, a

Sw

iss

coop

era

tive.

All

rig

hts

rese

rved

. Pri

nte

d in

U.S

.A.

KPM

G a

nd

th

e K

PM

G log

o a

re r

eg

iste

red

tra

dem

ark

s of

KPM

G In

tern

ati

on

al.

The Role of the Independent Auditor

Provide PBC List (contained in Chapter 9)

Financial statement audit

A-133 audit (higher and limited scope)

Some Exhibits are mandatory this year (indicated on exhibit index)

KPMG campus partners to communicate campus audit preparedness to Chancellor’s Office (CO) on first day of fieldwork

Planning meeting/entrance conference held

All PBC schedules provided in binder or on flash drive

Completed and management approved reporting package provided to KPMG campus team

4

May 2008 GAAP Reporting Workshop

© 2

00

8 K

PM

G L

LP,

the U

.S.

mem

ber

firm

of

KPM

G In

tern

ati

on

al, a

Sw

iss

coop

era

tive.

All

rig

hts

rese

rved

. Pri

nte

d in

U.S

.A.

KPM

G a

nd

th

e K

PM

G log

o a

re r

eg

iste

red

tra

dem

ark

s of

KPM

G In

tern

ati

on

al.

The Role of the Independent Auditor, cont.

Communicate progress and any difficulties or issues encountered during the audit, including potential internal control deficiencies and single audit findings, to:

Campus management prior to weekly CO meetings

CO via weekly CO meetings with campus partners

KPMG Systemwide Team via weekly progress reports

Meet deadlines set by CO, campus, and audit team (refer to audit timeline for key dates)

5

May 2008 GAAP Reporting Workshop

© 2

00

8 K

PM

G L

LP,

the U

.S.

mem

ber

firm

of

KPM

G In

tern

ati

on

al, a

Sw

iss

coop

era

tive.

All

rig

hts

rese

rved

. Pri

nte

d in

U.S

.A.

KPM

G a

nd

th

e K

PM

G log

o a

re r

eg

iste

red

tra

dem

ark

s of

KPM

G In

tern

ati

on

al.

Understanding the Role of the Campus

To have all requested schedules, including the completed and management approved reporting package, PRIOR to the first day of fieldwork (refer to Engagement Team Phone List for fieldwork start dates)

Provide suitable workspace for team (phone, internet connections, and access to printer)

Designate campus contacts for financial statement and A-133 audits

Meet deadlines set by CO, campus, and audit team (refer to Audit Timeline for key dates)

Constant communication with the audit team

6

May 2008 GAAP Reporting Workshop

© 2

00

8 K

PM

G L

LP,

the U

.S.

mem

ber

firm

of

KPM

G In

tern

ati

on

al, a

Sw

iss

coop

era

tive.

All

rig

hts

rese

rved

. Pri

nte

d in

U.S

.A.

KPM

G a

nd

th

e K

PM

G log

o a

re r

eg

iste

red

tra

dem

ark

s of

KPM

G In

tern

ati

on

al.

First Day of Fieldwork –Submission to KPMG Campus Team

All PBC schedules – to be provided in a separate set of PBC binders with indexing of all schedules and use of flash drive (refer to Chapter 9)

Completed and approved reporting package

Campus analytical review (fluctuation analysis - see

example) by financial statement line item (part of

reporting package) in WORD Document

7

May 2008 GAAP Reporting Workshop

© 2

00

8 K

PM

G L

LP,

the U

.S.

mem

ber

firm

of

KPM

G In

tern

ati

on

al, a

Sw

iss

coop

era

tive.

All

rig

hts

rese

rved

. Pri

nte

d in

U.S

.A.

KPM

G a

nd

th

e K

PM

G log

o a

re r

eg

iste

red

tra

dem

ark

s of

KPM

G In

tern

ati

on

al.

Key Deadlines – Submission to CO

Auxiliary organizations’ audited financial statements, including supplementary information schedules – September 30, 2008

Campus reporting package (includes financial statement

and A-133 audits, including FISAP) – October 16, 2008

Campus analytical review (fluctuation analysis) by FS line item – October 16, 2008

A-133 findings – November 5, 2008

Campus draft stand-alone financial statements (including management approved MD&A) to KPMG for review – November 24, 2008

8

May 2008 GAAP Reporting Workshop

© 2

00

8 K

PM

G L

LP,

the U

.S.

mem

ber

firm

of

KPM

G In

tern

ati

on

al, a

Sw

iss

coop

era

tive.

All

rig

hts

rese

rved

. Pri

nte

d in

U.S

.A.

KPM

G a

nd

th

e K

PM

G log

o a

re r

eg

iste

red

tra

dem

ark

s of

KPM

G In

tern

ati

on

al.

Planning Meeting/Entrance Conference

Campus and KPMG team introductions

Current year activity and issues

Scope of audit

PBC list clarification

Confirmations

Key deadlines Auxiliary organizations

Reporting package

Management’s discussion and analysis

Stand-alone financial statements

Confirm fieldwork timing

9

May 2008 GAAP Reporting Workshop

© 2

00

8 K

PM

G L

LP,

the U

.S.

mem

ber

firm

of

KPM

G In

tern

ati

on

al, a

Sw

iss

coop

era

tive.

All

rig

hts

rese

rved

. Pri

nte

d in

U.S

.A.

KPM

G a

nd

th

e K

PM

G log

o a

re r

eg

iste

red

tra

dem

ark

s of

KPM

G In

tern

ati

on

al.

Sample Schedules

10

May 2008 GAAP Reporting Workshop

© 2

00

8 K

PM

G L

LP,

the U

.S.

mem

ber

firm

of

KPM

G In

tern

ati

on

al, a

Sw

iss

coop

era

tive.

All

rig

hts

rese

rved

. Pri

nte

d in

U.S

.A.

KPM

G a

nd

th

e K

PM

G log

o a

re r

eg

iste

red

tra

dem

ark

s of

KPM

G In

tern

ati

on

al.

Questions