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Page 1 LICENSE DIVISION AUDIT BACKGROUND: The License Division is responsible for the issuance of all business and occupational licenses. Approximately $_____ million was generated from this revenue source last fiscal year. The License Division is located within the Revenue and Finance department. The Chief License Inspector is the head of the division and reports to the Finance Director. The division is comprised of seven license inspectors and several supporting clerical personnel. The operating budget for this division was approximately $250,000 last fiscal year. The business license system is automated to some extent. Customers can renew their licenses by mail: to do this a form is completed and mailed into the division. The information is key- punched into the computer and the correct fee and business occupation type is determined. The customer is billed and the license mailed after payment is received. However, the License Division does a large walk-in business. Exemptions are granted to senior citizens over 65 years of age and to disabled veterans conducting business through a sole proprietorship. There are no exemptions for corporations. SCOPE: The audit period will be for the last calendar year for licenses issued on annual renewal and for the last three months for new licenses issued. Internal control will be evaluated as of the last day of the field work. PLANNING: 1. Prepare an entrance letter and forward it to the Finance Director and the Chief License Inspector. 2. Prepare a planning program and budget for the preliminary work and obtain the approval of your audit team leader. 3. Review past internal audit reports and external auditors' comments. 4. Review budget documents for the License Division and their Service Level Summary for the current fiscal year. 5. Schedule an entrance conference with the Chief License Inspector in order to discuss the upcoming audit. 6.
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This note was uploaded on 05/16/2011 for the course AUDITING 201 taught by Professor Unknown during the Spring '11 term at Symbiosis International University.

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