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DOI Annual Business Conference Audit Approach to OMB Circular No. A-123 PowerPoint Presentation
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DOI Annual Business Conference Audit Approach to OMB Circular No. A-123

DOI Annual Business Conference Audit Approach to OMB Circular No. A-123

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DOI Annual Business Conference Audit Approach to OMB Circular No. A-123

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  1. DOI Annual Business ConferenceAudit Approach to OMB Circular No. A-123 A U D I T / T A X / A D V I S O R Y / L I N E O F B U S I N E S S

  2. Agenda • Auditors’ objective • Consolidated level procedures • Bureau level procedures • Assurance statement procedures

  3. Auditors’ Objective • Test for compliance with Federal Managers’ Financial Integrity Act (FMFIA) of 1982 • OMB Circular No. A-123, Appendix A provides guidance for the internal control over financial reporting of FFMIA • Utilize managements’ documentation to assist in understanding financial reporting processes • Consider internal control test results

  4. Consolidated Level Procedures • Gain an understanding of managements’ process • Verify establishment of senior assessment team, its authority, and members • Verify appropriateness of significant financial reports selected • Assess reasonableness of materiality assessments for each significant financial report • Verify significant accounts, major transaction cycles, and the relevant financial report assertions are identified and included • For each significant financial report

  5. Bureau Level Procedures • Inspect a sample of bureaus’ control documentation to verify that it includes controls at the: • Entity level • Control environment, risk assessment, monitoring, control activity, and information and communication processes • Process, transaction, and application level

  6. Bureau Level Procedures • Inspect a sample of the bureau control documentation for consistency with CFO Council’s Implementation Guide • Controls to mitigate the risk of financial statement errors • Data characteristics: source; receipt; processing; and transmission • Supervisor review; process and calculations performed in preparation of financial reporting; and process outputs • Use of computer application controls and controls over spreadsheets used in the preparation of financial reporting • Identification of errors: types of errors found; reporting errors; and resolving errors • Ability of personnel to override the process or controls

  7. Bureau Level Procedures • Inspect a sample of the internal control testingdocumentation to verify that it includes • Management’s assessment of the design of key controls • Nature, timing, and extent of testing of key controls • Assessment of operating effectiveness of key controls tested • Response and conclusions for deficiencies identified

  8. Assurance Statement Procedures - Bureaus • Read bureau assurance statement for conformance with Department guidance • Based on Department materiality • Compare managements’ and auditors’ testing results to bureau assurance statement to verify that: • Managements’ results support the assurance statement • Management identified all material weaknesses

  9. Assurance Statement Procedures - Consolidated • Inspect the assurance statement to verify that it includes: • Results of the bureau level assurance statements • Any material weaknesses that are identified • Statement of management’s responsibility for establishing and maintaining adequate internal controls • Statement identifying OMB Circular A-123 as the framework used by management to conduct the assessment • An assessment of the effectiveness of the agency’s internal control