HomeMy WebLinkAboutCORRESPONDENCE - RFP - P953 AUDITING SERVICES (5)d. Our firm has made a commitment to be up-to-date with the use of "paperless" audit
software in the engagements. We facilitate this with notebook computers with several
software applications on -site during the audit. We use these in conjunction with the
client's system to the fullest extent possible to save our time and your time.
e.
For example, some clients prefer to give us account analyses on disk or by e-mail,
and we can efficiently add our audit procedures.
Our overall goal in "paperless" audit software is to work with clients to take
advantage of the technology available from their systems and ours to produce a more
efficient process.
f Analytical procedures are first used in the planning of an engagement whereby
unaudited financial information is reviewed to identify significant changes for further
review. The most extensive analytical procedure planned for the audit is the
comparison of current year account balances to the prior year account balances. Any
significant variation among these factors is reviewed with MPO staff, and further
evidence is examined to document the propriety of the change.
We believe in going beyond these basic procedures to analyze trends and
relationships between years more significantly. This is a very cost-effective use of
audit resources and often results in trends and analyses that are also useful to the
client. Potential applications of analytical review include:
âĒS Percent return on investments.
â Payroll costs per employee
â Operating costs per various units of production.
â Program revenues per units of service.
f. The review and testing of internal controls is of added importance in the MPO audit.
Internal control review is also very important because of the MPO's growing
activities and potential growth.
The first consideration is of the MPO's internal control environment. This includes
analysis of such factors as management's philosophy and operating style,
organizational structure, methods of assigning authority, and personnel policies and
practices. The control environment reflects the overall attitude, awareness, and
actions of the MPO Council and management concerning the importance of internal
controls.
The second phase of the internal control structure is the accounting system. This
includes analysis of how transactions are initiated, processed and ultimately recorded
in the general ledger. All significant cycles of transactions are reviewed through
interviews with employees, inspection of documents used, and walk-throughs of
transactions through the entire system. The results of this review is documented
through checklists, flowcharts, and narratives.
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