reporting findings.doc - Wisconsin Department of Public Instruction Financial Services Team WISCONSIN PUBLIC SCHOOL DISTRICT AUDIT MANUAL REPORTING

reporting findings.doc - Wisconsin Department of Public...

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Wisconsin Department of Public Instruction, Financial Services Team WISCONSIN PUBLIC SCHOOL DISTRICT AUDIT MANUAL REPORTING FINDINGS Auditors may report financial statement findings, federal findings, or state findings in the single audit section of their report. The guidance for federal findings can be found in the Uniform Grant Guidance and the guidance for state findings can be found in the Wisconsin State Single Audit Guidelines. Guidance for financial statement findings can be found in Government Auditing Standards (Yellow Book) and in generally accepted auditing standards. Financial Statement Findings Findings in a financial statement audit may involve deficiencies in internal control, noncompliance with provisions of laws, regulations, contracts, or grant agreements, fraud, or abuse. Auditors should plan and perform procedures to develop the elements of the findings that are relevant and necessary to achieve the audit objectives when auditors identify findings as part of a GAGAS audit. The elements of a finding are discussed in paragraphs 4.11 through 4.14 of the Yellow Book as follows: 4.11 Criteria: The laws, regulations, contracts, grant agreements, standards, measures, expected performance, defined business practices, and benchmarks against which performance is compared or evaluated. Criteria identify the required or desired state or expectation with respect to the program or operation. Criteria provide a context for evaluating evidence and understanding the findings. 4.12 Condition: Condition is a situation that exists. The condition is determined and documented during the audit. 4.13 Cause: The cause identifies the reason or explanation for the condition or the factor or factors responsible for the difference between the situation that exists (condition) and the required or desired state (criteria), which may also serve as a basis for recommendations for corrective actions. Common factors include poorly designed policies, procedures, or criteria; inconsistent, incomplete, or incorrect implementation; or factors beyond the control of program management. Auditors may assess whether the evidence provides a reasonable and convincing argument for why the stated cause is the key factor or factors contributing to the difference between the condition and the criteria. 4.14 Effect or potential effect: The effect is a clear, logical link to establish the impact or potential impact of the difference between the situation that exists (condition) and the required or desired state (criteria). The effect or potential effect identifies the outcomes or consequences of the condition. When the audit objectives include identifying the actual or potential consequences of a condition that varies (either positively or negatively) from the criteria identified in the audit, “effect” is a measure of those consequences. Effect or potential effect may be used to demonstrate the need for corrective action in response to identified problems or relevant risks.
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  • Fall '17
  • William Heywood

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