GAS - GAS UTILITY AUDIT BACKGROUND: The gas utility company...

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Sheet1 Page 1 GAS UTILITY AUDIT BACKGROUND: The gas utility company has a franchise agreement with the city and collects under city ordinances a 10% utility tax and a 5% excise tax on customers that receive natural gas via underground pipelines. Revenues on the utility tax is approximately $2 million per year and on the excise tax, about $400,000. This audit will focus on exemptions granted to certain customers by the gas company, documentation for tax remittances made to the city for the last four years, and the classification of customers located near the city limits. Gas customers in the county are not charged the above taxes. SCOPE: The audit period for the testing of the billing system will be for the months April, May and June. Assessment of taxes due will be for the last four years. PLANNING: 1. Send an engagement letter to the Finance Director of the gas company informing him of the upcoming audit. 2. Hold an entrance conference with the Finance Director and discuss our objectives. Also obtain the name of the gas company contact person. Secure a place at the gas company from which to conduct the field work. 3. Gather background information through the examination of existing records, documents, and applicable sections of the City Code. Also review any applicable sections of the State law that pertain to the regulation of a gas utility. 4. Hold a meeting with the City Attorney and inform him of the direction and scope of the audit. Determine if there are any legal requirements that must be met by the city pursuant to the audit( rules of evidence on documentation obtained from the gas company, computer billing tapes, etc.). 5.
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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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GAS - GAS UTILITY AUDIT BACKGROUND: The gas utility company...

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