Audit Processes

Planning

Internal Auditing develops the scope and objectives for the audit. An audit program and an internal control questionnaire, which is used in the assessment of the internal controls, are formulated. The applicable account numbers for the unit being audited are determined and a test sample of transactions from the University's accounting records is prepared.

Entrance Conference

A meeting is scheduled with the unit director and the appropriate personnel to discuss the audit scope and objectives, time schedule, review process, and auditor's request for information and assistance. Any concerns raised by the unit personnel are also discussed.

Field Work

Internal control systems and procedures are evaluated through the observation of the unit's operations, discussions with the director and/or unit staff, and the review of a sample of transactions. The emphasis of the evaluation is to determine if there are adequate control systems and whether the systems are functioning as intended. The controls are measured against University and State of Colorado policies and procedures as well as generally accepted accounting principles. As each portion of the audit program and internal control questionnaire is completed, areas of deficiencies and potential recommendations are discussed with the unit director or staff and are documented in the audit work papers.

Draft Audit Report

After the field work is completed, a draft of the audit report is prepared. The report contains the scope and objectives of the audit and the criteria used in the evaluation process. The report also contains a description of the unit's operating functions and a summary of any control areas which need to be improved. The balance of the report provides detailed information related to each of the recommendations contained in the report. For each of the recommendations, the unit director is requested to develop a detailed response which will resolve the deficiencies identified in the audit. The draft of the audit report is provided to the unit director and appropriate staff prior to the exit conference.

Exit Conference

A meeting is scheduled with the same individuals who attended the entrance conference. At the exit conference, the draft of the audit report is discussed so that all of the parties understand the nature of the recommendations and agree upon the possible solutions to the items. Any misunderstandings or possible misstatements contained in the report are identified and resolved. Also, any areas identified in the audit, which were not significant enough to be included in the audit report but still represent a potential risk, are discussed.

Final Audit Report

If any misstatements in the audit report are identified during the exit conference, corrections are made and the final audit report is generated. This report is printed and bound in a booklet format by Internal Auditing. The report is distributed to the individuals listed in the Answers to Frequently Asked Questions portion of this web site.