Key Challenges for Audit Process

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Key Challenges for Audit Process

• Margaret Laithwaite

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Background

• Historically the internal control environment has
  been such at the University that the audit
  process has taken a full substantive approach
• All testing mainly done at final year end
• Submission dates of 31st December meant that a
  long final audit process was possible
• What has changed?
• Tighter reporting deadlines submission to HEFCE
  by 30th November means there is far lass time to
  audit at final year end
• Improved monthly reporting should mean that a
  final year end is much more like a monthend close
• Improvements to the control environment means
  that auditors should be able to place reliance on
  controls and do less substantive testing

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Future audit timetables

• Interim year end
• Year end 30th April (under review)
• Audit process during June
• Significant amount of testing to the interim year
  end point
• Final year end
• Year end 31st July
• Audit during early September
• Roll forward of balances at interim year end
• Audit tender process will propose this approach
• University will need to ensure a robust control
  environment for it to work

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Areas to improve

• Research income
• Payables Process
• Highly decentralised in some areas
• Weak segregation of duties
• Some infrequent users posting invoices
• Weak document tracking and retreival
• Very slow processing
• Authorised signatories too many, not always
  following proper authorisation procedures, no
  proper register
• Supplier base very large rationalise
• Fees and Expenses

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Areas to improve (continued)

• Fixed assets
• Accurate and timely asset records
• Donated assets (notification)
• Accounting Guidance
• Procedure manual (on web)
• Review and document processes
• Financial Training
• Eliminate infrequent users
• General University staff gt Expenses
  Requisitions and ordering
• Research investigators Budget holders gt
  General financial awareness training
• Senior management gt Strategic financial
  management
• Financial Regulations/procedures training to be
  undertaken

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Areas to improve (continued)

• Report Suite
• Reporting needs
• Refine and consolidate reports available
• Issue improved guidance to make them easier to
  find
• Accounts receivable/Credit Control
• Weak document control customer PO numbers not
  on sales invoices
• Review control procedures and authorisation
  procedures including
• Timeliness and accuracy of invoice raising
• Timeliness of direct bank credit allocation
• Raisinq of credit notes
• Review processes for bad debt provision write off
  and management information
• Suspense accounts