Financial Services Manual (FIN)

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Effective: 9/16/1992

Revised: 8/5/2008

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[ASU logo]

FIN 702: Scheduled Internal Audits

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Purpose

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To explain the process for scheduled internal audits

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Source

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Vice president for University Administration and General Counsel

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Policy

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University Audit and Advisory Services (University Audit) performs financial, operational, and compliance audits according to a planned audit schedule approved by the university president and the Arizona Board of Regents Audit Committee.


Basis for Selection for Audit

Departments are identified for audit on the basis of the assessed risk, considering factors such as revenue amount, cash handling, inventory control, and amount of disbursements. Audit areas included in the plan usually will be those with the highest combined assessed risk as determined by a formal risk assessment process.


Notification Memorandum

Two to three weeks before the audit, the director of University Audit will send a notification memorandum to the provost of the university, the executive vice president, treasurer, and chief financial officer, and the responsible dean/vice president with copies to the other university officers identified in the ASU University Audit and Advisory Services Schedule of Audit Participants, Column A, below. The introductory memorandum should:

  1. identify the area/unit to be audited
  2. identify the preliminary audit objectives

    and

  3. inform the recipient that an entrance conference will be scheduled.

Entrance Conference

One to two weeks before the audit, University Audit will schedule an entrance conference with the department to be audited. Participants should include the university officers identified in the ASU University Audit and Advisory Services Schedule of Audit Participants, Column B, below. The dean/university officer may include other appropriate participants.

The purpose of the entrance conference is to:

  1. discuss the preliminary audit objectives and determine whether particular areas of concern should be addressed
  2. introduce the University Audit staff members performing the audit
  3. identify the program contact person with whom University Audit can work in performing the audit

    and

  4. review the final reporting process.

Fieldwork

University Audit will perform fieldwork in the department being reviewed. University Audit will attempt to be unintrusive; however, department staff will usually be asked to help collect documents for review.

During the course of the audits, University Audit will interview knowledgeable personnel, review policies and procedures manuals maintained by the department, and review documents related to department operations. Additional audit procedures also are performed, as appropriate.


Recommendations

The audit reports will include recommendations to improve financial and management controls, as appropriate. University Audit will discuss its recommendations at an exit conference with the responsible university officers.

The audited department is responsible for implementing the recommendations. University Audit will review the implementation of management recommendations as part of the quarterly report on internal audit status.


Draft Report

A draft report is provided to the university officers identified in the ASU University Audit and Advisory Services Schedule of Audit Participants, Column C, below.


Exit Conference

An exit conference is held with the university officers identified in the ASU University Audit and Advisory Services Schedule of Audit Participants, Column F, below. The draft report is reviewed to:

  1. confirm the correctness of the factual data presented
  2. determine whether all pertinent information has been considered
  3. answer questions about the report, recommendations, or findings
  4. discuss revisions/changes proposed by the dean, vice president, or university officer

    and

  5. discuss the timing of the preparation of departmental responses to recommendations, if not already completed.

Responses to Recommendations

Responses to recommendations are prepared by the director of the program being audited, approved by the responsible dean, or, for nonacademic areas, the vice president or university officer to whom the director reports, and submitted to University Audit.

In general, responses should state whether agreement exists on the findings and recommendations, specifically state the changes that will be implemented, and provide target completion dates for implementation of the changes.

University Audit is available to provide departments with advice on responses.


Final Report Distribution

Departmental responses and agreed-upon revisions are incorporated into the report before final distribution. The university officers identified in the ASU University Audit and Advisory Services Schedule of Audit Participants, Column G, below, receive the final report.

The final report is also distributed to ASU senior administration and the Arizona Board of Regents Audit Committee.


Questions about this Policy

Questions about this policy should be addressed to the vice president for University Administration and General Counsel. Following is a chart that specifies which participants should attend which meetings

ASU University Audit and Advisory Service
Schedule of Audit Participants
  A B C D E F G
Engagement
Letter
Entrance
Conference
First Draft
Report
without
Responses
Second Draft
(Issued if
Needed)
Report
without
Responses
Final Draft
Report
with
Responses
Exit
Conference
Final
Report
Including
University
Responses
President         X   X
Director of program being audited X X X X X X X
Dean/vice president/university officer (1) X X (2)   X X X X
Audit liaison for responsible provost/VP X X   X X X X
Provost of the University X   X X X X(3) X
Director, ASU University Audit and Advisory Services X X X X X X X
Associate vice president for Financial Services             X
Executive vice president, treasurer, and chief financial officer X   X X X X(3) X
Vice president for University Administration and general counsel X           X
Note 1: For nonacademic areas, the vice president or university officer to whom the director of the program being audited reports.
Note 2: Participation in the entrance conference is desirable, but discretionary, for the dean/university officer.
Note 3: Participation in the exit conference is desirable, but discretionary, for the provost of the university and the executive vice president, treasurer, and chief financial officer.

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