Res 2008-099 - Laserfiche WebLink

Home Browse Search

identifying a plan for testing records and procedures using statistical sampling and computer auditing where appropriate, the method for evaluating internal control and the audit procedures to be taken prior to performing detail audit work. ARTICLE 2 AUDITOR'S SERVICES AND RESPONSIBILITIES 2.1 BASIC SERVICES The Auditor will: 2.1.1 Prepare an audit plan based on a risk assessment performed and impacted by key processes identified by the Auditor. The Auditor will ensure that the audit plan will cover the 2008 audit, and will be revised in subsequent years during the term of this Agreement based on changes in accounting requirements or changes in City staffing. For each key process included in the audit plan, the Auditor will perform the following work: a) Understand the accounting process in depth, and place significant process controls in place to mitigate risk; b) Test significant control points to determine if controls are operating as designed; c) Compare processes and controls to "best practices" to determine effectiveness; d) Report to the City on the effectiveness of the audit processes; and e) Determine whether any residual audit risk remains and whether substantive audit tests are required. The Auditor will limit the substantive audit testing to areas where the effectiveness of process controls does not reduce the risk to a relatively low level or where substantive testing is more efficient. 2.1.2 Focus on understanding and evaluating the internal control structure that the City uses to monitor, capture and control risks. The Auditor will perform this evaluation at both the management level as well as the individual process level. 2.1.3 Discuss internal control weaknesses identified by the Consultant with City staff. In addition, the Auditor will discuss major control weaknesses at the City management level. 2.1.4 Establish analytical procedures and utilize these procedures to include comparisons of account balances between accounting periods and ratio and trend analysis to improve the Auditor's understanding of the City and its operations in order to identify critical audit areas. These procedures will include, at a minimum, the comparison of current account balances to similar amounts in the prior annual period's financial statements and the current period's budget. 2.1.5 Assess the audit risk associated with possible violations of laws and regulations related to financial statements. In addition, the Auditor will assess specific information regarding the (',ttiiSfa, hl~~a3xcNt cYi k~Isd1. t S t' 2