Audit Support

What is an auditor? What does an auditor do?
Auditors help to provide the capital markets with confidence and assurance in financial reporting. Auditors perform independent evaluations to ensure that information, such as the financial statements, presents a true and fair view of a business’s financial performance and position. Auditing is the bedrock of our financial system.

Why are audits performed?
The goal of an internal audit is to add value and improve your business operations. Internal auditors provide reasonable assurance to the audit committee of the board of trustees and management that risks are identified and managed; they also establish that the financial, managerial, and operational information is accurate, reliable, and timely.

How are departments selected for an audit?
The frequency of departmental audits is based on a risk assessment process. The risk assessment considers various factors, including the size and complexity of the department, research activity, compliance risks, amount of cash receipts, and staff changes. Departments with high risk will be audited more frequently than those with medium or low risk. Management can also request an audit whenever they deem necessary.

What types of audits do RGB Accounting perform?
i.      Financial
Financial audits address issues related to the accounting and reporting of financial transactions, including authorizations, cash receipts, cash disbursements, and commitments to purchase.

ii.    Compliance
Compliance audits assess the degree to which the area has adhered to laws, rules, regulations, policies, and procedures.

iii.   Operational
Operational audits are the most common type of audit. Operating procedures, document flow, and internal controls are reviewed in detail. Operational audits assess the effective and efficient use of resources while accomplishing particular objectives.

iv. Investigative
Investigative audits are performed when required and are the result of alleged acts of fraud or other misconduct. Alleged white-collar crime, misuse of business assets, and conflicts of interest are examples of reasons for an investigative audit. The focus of internal investigation audits is to determine whether internal controls were compromised.

v. Information Systems
Information systems audit typically addresses general controls, focusing primarily on input controls, output controls, processing controls, backup and recovery plans, data security, and hardware security.

What happens during an audit?
The audit process consists of four phases.

Planning: The objectives and scope are determined. A meeting will be held with the department head and lead fiscal administrator to discuss the audit plan and what is required.

Fieldwork: Interviews are conducted and testing compliance with policies and procedures. Internal controls are also assessed and tested.

Reporting of Results: Summary of audit findings and recommendations is prepared and presented to management for discussion. Once the findings/recommendations are finalized, a report is issued to management.

Follow-up: All audit recommendations have been satisfactorily implemented. Some verification procedures may be performed to ensure that recommendations have been adequately addressed.

Why would I want to request an audit?
Audits are very beneficial to evaluate your business’ operations and system of controls. If a department has recently adopted additional supervisory responsibility or implemented newly installed computer systems, an audit can review the current procedures to determine the effectiveness of internal controls. Also, periodic audits are recommended to ensure overall compliance.

Can I request an internal audit’s assistance?
Any member of management can contact RGB Accounting for our audit services or consult on an issue. Our staff will review your request, and we will decide how to meet your needs best. We are always available to advise you on your business policies and procedures. We also offer in-house consulting services on internal control matters and provide suggestions and recommendations for your business.

How long do audits generally take?
The time it takes to audit your business will depend on the size, complexity and involved risk of each department in your business. Generally, audits can last from two to six months.

Who receives the final audit report?
The final audit report will be sent to the business owner and, if necessary, other senior management.

What are the benefits of the audit?
Internal audits assess each department’s control environment and compliance with regulations. We provide recommendations and suggestions to improve the overall efficiency and effectiveness of procedures and processes, which can help you better and faster achieve your goals.

What is a department’s role during an audit?
We will need to meet with the owner of the business and key senior managers of the department for planning and interviewing purposes. However, we will strive to accommodate any time constraints that you may have. Inevitably, some information and documentation may need to be provided.

What are the objectives of an internal audit?

i. Evaluate the effectiveness and efficiency of internal controls and resources employed.

ii. Review the reliability and integrity of financial and operational information.

iii. Review fiscal and administrative operations.

iv. Assess the use of established systems to ensure compliance with corresponding policies, procedures, plans, laws, and regulations.