OSA Update
Katie Thigpen, Financial Audit Supervisor
Michael Spivey, IS Auditor
NC Office of the State Auditor
Session Etiquette
• Please turn off all cell phones.
• Please keep side conversations to a minimum.
• If you must leave during the presentation, please do so
as quietly as possible.
• Thank you for your cooperation!
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Session Topics
Financial Audit Update
Information Systems Audit Update
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Financial Audit Update
Financial Audit Update - Topics
• Summary of Financial Reporting for 2013
• Preview of Financial Reporting for 2014
• Audit Standards Update
• Audit Plan for 2014
• Internal Controls in a Financial Statement Audit
• Preparing for a Financial Statement Audit
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Summary of Financial Reporting - 2013
• Findings/Issues Noted
• Statement on Auditing Standard 115
Communicating Internal Control Related Matters
Identified in an Audit
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Summary of Financial Reporting - 2013
• Findings/Issues Noted
No pervasive reportable findings.. No Wipe Out!
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Summary of Financial Reporting - 2013
Items of note from FY 2013
• Blending Disclosure (GASB 62)
• Disaggregation (GASB 68)
• MD&A (GASB 34)
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Preview of Financial Reporting - 2014
• Financial Reporting Standards Update (GASB)
– GASB 65 - Items Previously Reported as Assets and
Liabilities
– GASB 66 - Technical Corrections—2012—an
amendment of GASB Statements No. 10 and No. 62
– GASB 67 - Financial Reporting for Pension Plans—an
amendment of GASB Statement No. 25
– GASB 70 - Accounting and Financial Reporting for
Nonexchange Financial Guarantees
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GASBS 65
Items Previously Reported as Assets and
Liabilities
• Current or Advance Refundings of Debt
• Government-Mandated Nonexchange
Transactions and Voluntary Nonexchange
Transactions
• Debt Issuance Costs
• Use of the term “Deferred”
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GASBS 66
Technical Corrections – 2012
• Amendment of GASB 10 and 62
No impact on University financial reporting
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GASBS 67
Financial Reporting for Pension Plans
• Focuses on PLAN reporting
• Replaces GASB 25 and GASB 50
– 25 - Financial Reporting for Defined Benefit
Pension Plans and Note Disclosures for Defined
Contribution Plans
– 50 - Pension Disclosures
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GASBS 70
Accounting and Financial Reporting for
Nonexchange Financial Guarantees
• Objective
• Example
• Anticipated impact
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Highlights for Financial Reporting - 2014
• Pro Forma Update
• Changes to the FY14 Pro Forma
• GASB 68
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Auditing Standards Update - 2014
No impact on fiscal year 2014 audits
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Federal Compliance Audits - 2014
Federal Programs Selected For Audit
• Research and Development Cluster
• Student Financial Assistance Cluster
• Higher Education Grant
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Financial Related Audits
• Financial Related vs Financial Statement Audit
• Bridging the gap
• Risk assessment
• Ideas
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Internal Controls in a Financial Statement Audit
• What the standards say… (SAS 122)
• Elements of Internal Control
– Control Environment
– Risk Assessment
– Information System
– Control Activities
– Monitoring
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Preparing for the Audit
• Talk to the auditors
– Before the audit
– During the audit
– After the audit
• Organize documentation
• Analyze the statements for variances
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Information Systems Audit Update
• Summary of 2013 IS Audit Procedures
• Why Should I Care About IT General Controls?
• Plan for 2014 IS Audit Procedures & Beyond
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Summary of 2013 IS Audit Procedures
2013 – Fourth Year of Financial / IS Audit Partnership
Year three – formal communication of IS issues to CIO
– NOT findings for the Financial Statement audit
– Letters showing “Opportunities for Improvement”
Year four – informal communication of IS Issues
– NOT findings for the Financial Statement audit
– Followed up on prior year “Opportunities for Improvement”
Goal remained to help you avoid findings in an IT audit
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Summary of 2013 IS Audit Procedures
• General Observations from 2013 Work:
– Follow-up on topics from 2012
– Common issues in 2013
• UNC-GA Banner Hosting Services audit
– IT audit released 12-19-13
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Why Should I Care About IT General Controls?
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Plan for 2014 IS Audit Procedures & Beyond
• Continue Partnership work with Financial
Audit
• Leverage prior year work where possible
• Reduction in scope for 2014
• Goals:
– Improve efficiency and reduce IS Audit
contribution to your audit bill
– Future – Return of IT General Control audits
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Questions & Answers
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Thank You!
Katie Thigpen, Audit Supervisor
Office of the State Auditor
katie_thigpen@ncauditor.net
Michael Spivey, Information Systems Auditor
Office of the State Auditor
michael_spivey@ncauditor.net