Audit Readiness

Last updated: 12/03/2020 - 4:14pm

The single audit reports may be found on the Single audit page.

FAQ

WHAT IS AN AUDIT?

An audit is generally a verification of compliance.  Audits can be programmatic or financial and involve different types of testing and assessments, depending upon the audit purpose, source of funding and auditor affiliation.

WHAT IS THE PURPOSE OF AN AUDIT?

Audits are conducted to provide assurance that reports do not contain material misstatements, to assess the strength of internal controls, and/or most commonly with sponsored projects, to provide assurance of the recipient’s compliance with requirements governing the use of funds. 

ARE ALL AUDITS FINANCIAL?

No.  Audits can be programmatic or financial and involve different types of testing and assessments depending upon the audit purpose, source of funding and auditor affiliation.

WHO CONDUCTS AUDITS?

Licensed Professionals who use the Generally Accepted Auditing Standards (GAAS). Those audits that involve the examination of federally funded activity must be conducted in compliance with Generally Accepted Government Auditing Standards (GAGAS). 

Related Documents

Audit Management Job Aid

 

WHO SHOULD BE CONTACTED IF AN AUDIT INQUIRY IS MADE?

Direct audit inquiries to researchaudit@asu.edu.

 

WHICH RESEARCH OPERATIONS' TEAM SERVES AS THE ASU LIAISON FOR AUDITS?

The Fiscal Oversight Team (FOT) of Research Operations serves as the audit liaison for sponsored audit and review requests and will respond to requests for acknowledgement or scheduling as needed. FOT keeps stakeholders informed while seeking to facilitate timely, complete, precise and appropriate responses from the most accurate source for each audit inquiry with the least amount of disruption to ongoing operations. The Assistant Director of the FOT serves as the official point-of-contact in the Sponsored Projects Audit Liaison role. The role of the Fiscal Compliance Team (FCT) Manager is to manage audits and site visits involving sponsored projects and to engage the support and advice of the liaison as needed to effectively respond to, and successfully close, audits and site visits.

Research Operations central administrators, Unit administrators, Principal Investigators, Unit sponsored projects staff, and ASU central administrative offices all have important responsibilities in responding to audit and site visit requests. The coordinating role of the FCT Manager is the key to efficient and responsive interactions with parties external to the University.

It should be noted, however, that all audits, reviews, site visits, and external inquiries are not of equal complexity and do not all require the same level of engagement or oversight. Consequently, the Fiscal Compliance Team (FCT) under the supervision of the Sponsored Projects Audit Liaison will exercise professional judgement and discretion in determining the extent to which the audit management job aid instructions will be applied to any individual audit, review, site visit or external inquiry. Likewise, FCT will determine the level of oversight, tracking and coordination required of its staff in each instance.

For those external inquiries that require minimal effort, involve minimal risk or likelihood of significant impact, and are of short duration, the active involvement of FCT is not always warranted and the full application of audit management protocols outlined in the Audit Management Job Aids can be scaled back. For these instances, FCT may direct the individual units and/or Research Operations team(s) to respond to the external inquiry without detailed tracking or coordination by FCT. However, in those cases, unit stakeholders and central administrators should reach out for FOT support should any concerns or need for guidance arise.

HOW SHOULD the unit PREPARE FOR AN AUDIT?

Audit preparation takes place throughout the entire life of the project. It consists of managing the project, reviewing project accounts to ensure all charged costs support the project’s scope of work, becoming familiar with sponsor requirements, and adhering to university policy.

WHAT SHOULD an Individual do during AN AUDITOR INTERVIEW?

Always:

  • Be honest!
  • Forthrightly provide accurate and complete information.
  • Answer questions to the best of your ability. It is ok if you don’t know the answer. The university audit liaison will arrange to have your answer provided to the auditor at a later date.
  • Ask for clarification if you don’t understand a question.
  • Carefully consider your assertions/statements/responses prior to making them.
  • Ensure an OKED audit liaison is present for the interview.

WHAT SHOULD not be done IN AN AUDITOR INTERVIEW?

Never change documents or provide false information. If a mistake was made, processes will be corrected to avoid the mistake in the future.

ANY TIPS  ABOUT DOCUMENTATION OF EXPENSES?

Documentation should speak for itself.  Documentation tells the story of what transpired during a project period.  When a project ends, the file should stand on its own.  There should be no need for any additional explanation of any transaction or event beyond what is already on file as part of the transaction.  File documentation should support how and why we administered funding for which we are responsible.

 

HOW LONG SHOULD DOCUMENTATION BE RETAINED?

Documentation must be retained in accord with the Sponsored Projects Record Retention Schedule.

WHO WILL AUDITORS MOST LIKELY REPRESENT?

Auditors are frequently encountered as the annual audit required by the Uniform Guidance (2 CRF 200) is completed.  This audit is conducted by the State of Arizona Office of the Auditor General for reliance by all funding agencies.  This general audit eliminates the need for redundant audits to satisfy multiple funders.  

The annual audit eliminates the need for many audits, but ASU is still visited by auditors representing various sources of funding.  Auditors may represent any of the following:

  • Federal government agencies
  • State and local government agencies
  • Educational institutions
  • Foundations
  • Industries
  • Foreign entities

WHEN DO AUDITS OCCUR?

Audits can occur anytime during the life of an award.  They can occur prior to issuance of funding and can occur for an extended period after an award ends.  Three years after the project end date is commonly cited as the post-award audit period, but we retain records for seven years after the account closeout.  Audits occur on campus where sponsored activity takes place, at an auditor's place of business or at an alternate "neutral" location, depending on the nature of audit, nature of auditor, or budgetary constraints.

What WOULD A SITE VISiT LOOK LIKE?

A site visit may be part of any type of audit.  This is the auditor’s chance to step out of the books, and review what is happening in real-time.  How are things going?  Are things functioning in the manner purported by assertions and commitments?  Is anything observed that may cause concern regarding our ability to steward funds and carry out the scope of work satisfactorily?  The site visit is often a very collaborative exercise where the auditor/reviewer/program representative is interested in how they can help make things easier for us administratively and explain rationale behind their practices and requirements.

WHAT ARE SOME COMMON APPLICABLE REGULATIONS?

Should ORIGINAL DOCUMENTATION be provided TO THE AUDITOR?

No. Original documentation should be kept secure, and not be sent off-site.  Auditors may examine appropriate original documentation on-site.  

What if an ASU individual has an audit concern they want to raise?

The issue should be brought to the attention of the individual's supervisor.  The ASU Hotline discusses other options for reporting.

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