FULL AGENDA PACKET_2021-05-04 - Laserfiche WebLink

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N„�N"P'.,x�",",�'� NNfK.R'°�`dy:',7""'�"V;;W� N�'C4;n�"!h!Cr"N'��arli�u�INIWN;w��'��INN�1fi'u�Y�N�,I��'��IIN��GNII��NkN%(IMNIfIP�!E�Ni��Nf�I�NIYCd�VrY4i.Nnfi�N�i'�NdII�I�VI�Nrh��k"�'�;iINN�1111�IG�iiYrN)Y'�N�'�"(�i9191iNNiV�YNkiI��NN�NkNa➢ During the systems evaluation phase, we will gain an understanding of the internal control structure of the City for financial accounting and relevant operations. Next, we will identify control objectives for each type of control that is material to the financial statements, and then identify and gain an understanding of the relevant control policies and procedures that effectively achieve the control objectives. Finally, we will determine the nature, timing, and extent of our control testing and perform tests of controls. This phase of the audit will include testing of certain key internal controls: • Electronic data, including general and application controls reviews and various user controls Financial reporting and compliance with laws and regulations We will test controls over certain key cycles. One audit efficiency initiative is to rely heavily on internal controls when appropriate, and to creatively look at internal control testing to make it as efficient as possible. This means not routinely performing detailed tests of transactions using large samples. We first seek to identify key controls, and then identify possible testing through alternative rnethods, such as observation, interviews, and re -performance. These tests serve not only to gather evidence about the existence and effectiveness of internal control for purposes of assessing control risk, but also to gather evidence about the reasonableness of an account balance. We will also develop our internal control tests to assess the compliance with certain provisions of laws, regulations, contracts, and grants for which noncompliance could have a direct: and material effect on the determination of financial statement amounts. Our use of multi purpose tests allows us to provide a more efficient audit without sacrificing quality. Our assessment of internal controls will determine whether the City has established and maintained internal controls to provide reasonable assurance that the following objectives are met: Transactions are properly recorded, processed, and summarized to permit the preparation of reliable financial statements and to maintain accountability over assets Assets are safeguarded against loss from unauthorized acquisition, use, or disposition Transactions are executed in accordance with laws and regulations that could have a direct and material effect on the financial statements We will finalize our audit programs during this phase. We will also provide an updated Prepared by Client Listing based on our test results and our anticipated substantive testing. During the internal control phase, we. will also perform a review of general and application Information Systems (IS) controls for the applications that are significant to financial statements to conclude whether IS general controls are properly designed and operating effectively, and consider application controls as part of the internal control assessment in the financial statement audit. Our strategy for the IS review of the applications will involve reviewing all the general control activities, including the computerized and manual processes. We will determine the scope of work by applying the concepts of materiality and risk assessment to effectively reduce examination inefficiencies. When planning this examination, we will gain an understanding of the City's operations by reviewing its current controls and control objectives as documented and will also review prior years' audit work and the status of corrective actions. Based on our preliminary review, we will perform an initial risk assessment of each critical element in each general control category, as well as an overall assessment of each control category. We will then proceed to assess the significant computer -related controls.