New Auditing Standards: How they impact YOU!

1
New Auditing Standards How they impact YOU!

• The Risk Assessment Suite of Audit Standards
• SAS 104 Amendment to SAS 1, "Codification of
  Auditing Standards and Procedures" ('Due
  Professional Care in the Performance of Work')
• SAS 105 Amendment to SAS 95, "Generally Accepted
  Auditing Standards"
• SAS 106 Audit Evidence
• SAS 107 Audit Risk and Materiality in Conducting
  an Audit
• SAS 108 Planning and Supervision
• SAS 109 Understanding the Entity and Its
  Environment and Assessing the Risks of Material
  Misstatement
• SAS 110 Performing Audit Procedures in Response
  to Assessed Risks and Evaluating the Audit
  Evidence Obtained
• SAS 111 Amendment to SAS 39, Audit Sampling

2
Key Control Evaluation

• Key control those that are most effective and
  reliable in preventing or detecting material
  misstatements.
• Often includes actions of supervisors and
  business managers
• Examples reconciliations, follow up on exception
  reports, budget to actual analysis, proper access
  to information systems.

3
Key Control Evaluation

• Does the controls prevent or detect errors?
• Ownership Comptrollers Office
• Are departments actually using the control?
• Ownership Departments
• Auditors will look at documentation, will
  recreate a transaction, will interview departments

4
Processes

• Auditors will focus less on financial statement
  balances and more of the processes leading to
  those balances.
• Auditors may interview you to learn about
  internal controls that you have in place.
• Auditors may interview you to learn where
  existing documentation of controls, such as
  policies, reside.
• Auditors may look at your transactions to see if
  they were carried out as dictated in the policy.

5
Sampling of Transactions

• Auditors may look at more transactions than they
  have in the past.
• Auditors may look at transactions in process
  areas that they have not examined in the recent
  past.
• Auditors may talk to more departments to gather
  information.
• If you cant prove it, it didnt happen.

6
Impacts to NAU

• Identify areas for improvement of key business
  processes and internal controls. (policy
  improvement, better monitoring)
• Provides documentation for accountability to ABOR
• Can impact bond ratings
• Can be basis for Internal Audit plans and
  Financial Controls reviews