Standards vs Procedures Auditing standards differ from auditing
- Slides: 57
Standards vs. Procedures Ø Auditing standards differ from auditing procedures. Procedures are acts that the auditor performs during the course of an audit in order to comply with the standards.
GAAS Generally Accepted Auditing Standards
OVERVIEW Ø Issued by the American Institute of Certified Public Accountants – AICPA Ø Defined in the Statements on Auditing Standards - SAS
Ø General Standards Ø Field Work Standards Ø Reporting Standards
SAS 95 & 98 General Standards Ø l Adequate proficiency and training as an auditor • l The audit is to be performed by a person having adequate technical training and proficiency as an auditor. Independence • An independent mental attitude is to be maintained by the auditor
Due Professional Care Ø l Due professional care is exercised in the performance of the audit and preparation of the report.
Standards of Field Work Ø Planning and Supervision l l The work should be planned any assisting auditors should be supervised. Understanding the basic characteristics of the client
l Internal controls • Internal controls should be evaluated as a basis for relying on the records for testing/sampling.
Ø Sufficient evidential matter l Records, observations, inquiries and if necessary 3 rd party records should be used in determining reliable audit results.
Ø Standards of Reporting l Basically apply to financial auditing, not tax/fee compliance
How do the standards relate to IFTA and IRP auditing? l Both the Agreement and the Plan address these standards in their respective Audit Procedures Manuals.
General Standards Ø Adequate training and proficiency
IFTA Audit Procedures Manual l A 200 General Standards • . 100 Training and Proficiency l l Auditors should have adequate technical training and proficiency as outlined in Section A 400 – Personnel Qualifications and Responsibilities • A 410 Administration • A 420 Audit Staff
IRP Audit Procedures Manual (proposed) l Article 2 - General Accounting and Auditing Standards • 201. Training and Proficiency • The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor.
Independence Ø An independent mental attitude is to be maintained by the auditor.
IFTA – Audit Procedures Manual l A 200 Auditor Independence • Auditors should maintain independent mental attitudes in relating to audit assignments. The auditor must be without bias with respect to the licensee under audit to ensure impartiality. This independence is an obligation to fairness.
IRP – Audit Procedures Manual (proposed) Ø Article 2, 205. Auditor Independence Free from personal and external impairments to independence l Independent mental attitude l Without bias with respect to Registrant l Maintain impartiality l
Due Professional Care
IFTA Audit Procedures Manual Ø A 200 – General Standards Ø. 300 Professional Care l Professional care should be exercised during the audit field work and in preparing the Interjurisdictional Audit Report
IRP Audit Procedures Manual (proposed) Ø Article 2 – General Accounting and Auditing Standards Ø 202. Professional Care l l l Conducted in a professional manner Results clearly documented Uniform program
Standards of Field Work
Planning and Supervision
IFTA Audit Procedures Manual Ø A 220 Examination Standards l . 100 Preaudit analysis • Preaudit analysis shall be conducted and documented. l l Reported information Trends Ø A 410. 200 l …. There must be supervisory follow-up and review of the auditor’s procedures
IRP Audit Procedures Manual (proposed) Article 2, 204 – Adequate Planning and Supervision Ø Field work adequately planned and supervised Ø Standardized audit program (checklist) Ø Report and work papers reviewed and approved by Audit Supervisor
Internal Controls Trip Sheets Summaries Returns/Registration
IFTA Audit Procedures Manual Ø A 220. 200 Examination Standards l Study and Evaluation • Internal accounting should be evaluated in order to determine if the licensee’s records can be depended on in order to perform a sample. Ø A 640 Evaluation of Internal control l . 100 Review and documentation • Information-gathering phase • Inquiry • observation
• • Changes in the accounting system Records retained Supporting documentation Identify weaknesses in the system
IRP Audit Procedures Manual (proposed) Ø 203. Study and Evaluation l Registrant’s reporting system • Study • Evaluate l Sampling test work and projections • Reliability of internal accounting controls • Impact of any weaknesses in the controls
Ø Article 7 l 702. Evaluation of Internal control • • • Review and documentation Tests of compliance Report on weaknesses
Sufficient Evidential Matter
SAS 103 Ø Requires audit documentation in sufficient detail to: l Provide an experienced auditor with no previous connection to the audit a clear understanding of the work performed. • • Nature Timing Extent Results of audit procedures performed
l l The audit evidence obtained, its source and the conclusions reached. Requires the auditor to document audit evidence that is identified as being contradictory or inconsistent with the final conclusions • How the auditor addressed the contradiction or inconsistency
IFTA Audit Procedures Manual Ø A 520 Standard Approach l l Evaluate licensee’s distance accounting Verify fleet miles/kilometers to source documents Determine if distance accounting properly accumulates all operation distances Verify jurisdiction allocations
Ø A 670 Audit Documentation l l l Communicate audit results Document & justify procedures Indicate source of audit results Communicate suggestions & recommendations Clearly support audit findings
Ø A 680 Audit File Contents l . 100 Schedules • Summary schedule • Supplementary schedules l . 200 Support Documentation • Detail information l Actual records reviewed which support audit results
• • • l Detail of retail or bulk purchases Detail of bulk fuel withdrawals Analysis of trips audited Listing of Records Maintained • Indicate what records are maintained • If in compliance with the Agreement & the Plan
IRP Audit Procedures Manual (proposed) Ø Article 2, 206. Working Paper Documentation l Working papers should be sufficiently detailed so that a reviewer (internal or external) can understand them without extensive oral explanations….
Ø Working papers should: • • • Provide the principal support for the Audit report Aid in the performance of and review of audits Facilitate third party reviews Document whether audit objectives were achieved Document all planning, audit procedures performed and conclusions reached
Ø 401. Adequacy of records l l l Consistently product required information to substantiate application Sufficient detail that vehicle movement may be traced Operational records that support • Total In-Jurisdiction Distance • Total Distance Ø 406. Accountable Distance Traveled l Registrant must record all movement • • • Interjurisdictional Intrajurisdictional Empty Deadhead Bobtail
Standards of Reporting
IFTA Audit Procedures Manual Ø A 660 Audit Reports l . 100 Licensee Audit Report • • Name and Address of licensee Account Number Audit Period Types of records audited Description of audit techniques Net distance adjustments Net tax paid fuel purchases adjustments
• • l MPG/KPL as reported Net fuel tax adjustment per jurisdiction Remarks and recommendations Signature of auditor or reviewing official and date Interjurisdictional Audit Report • • • Name of base jurisdiction Name and address of licensee FEI or equivalent Reported tax by jurisdiction Audited tax by jurisdiction
• • • Penalty Interest by jurisdiction Total by jurisdiction
IRP Audit Procedures Manual (proposed) Ø Article 8 l 802. Registrant Audit Report • • Name and address of Registrant Account number and Fleet number Registration Year(s) audited Distance traveled and percent as originally filed Distance traveled and percent as a result of Audit Amount of percent factor change Net fees due each Member Jurisdiction
Ø Remarks, recommendations, observations, and findings Ø Identification of any Power Units removed from the Fleet w/full fees assessed Ø Date of issuance and name of the auditor(s)
Ø 803. Interjurisdictional Audit Report l Evidence of timely notification to other jurisdictions • • • Name of Base Jurisdiction Name and address of Registrant Account number Registration Year(s) Number Apportionable Vehicles
l Reported Jurisdiction distance • In-jurisdiction distance percentages • Apportionable fees l l l Brief narrative Date of issuance and name of the auditor(s) Statement on adequacy of distance accounting system
SUMMARY Ø Both the Agreement’s and Plan’s Audit Procedures Manuals follow Generally Accepted Auditing Standards to the degree in which these standards are applicable their respective audit situations.
Ø It is the responsibility of each member jurisdiction to insure that all audits are conducted in accordance with these standards and are applied fairly, without bias, to each licensee and registrant.
- Ifta audit manual
- Substantive procedures
- Parallel simulation audit
- Configuration management standards and procedures
- Whyscas
- Aicpa auditing standards
- Accounting standards act
- Canadian auditing standard 540
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