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Get Ready for an Audit
Monday April 11, 2016 3:15PM
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• Incorporated since 1988• 160 employees and growing• 100% debt‐free• 18‐24% business growth for 14 consecutive years• Wide range of IT solutions
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• 30+ years• Supports all business types• Full property management and accounting• Fully manages your:
• Website• Phone system• Marketing campaigns• Service Management
• Workflow management• Customer relationship management• And more!
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Ali HinkleInstructional Designer & Trainer3 years with Rent Manager
• Internal Training• Virtual Training• User Conference• Rent Manager University
CPA (inactive)
• Grant Thornton Senior Audit Associate
• Caterpillar Senior Accountant
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Types of AuditsFinancial StatementVerify accuracy of financial statements
1
ComplianceVerify proper adherence to rules and guidelines
2
IRS Verify accuracy of information reported on tax forms
3
Internal Internal verification of reports and controls
4
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Auditor Goals
1. Existence or occurrence
2. Completeness
3. Rights & obligations
4. Valuation & allocation
5. Presentation and disclosure
Use supporting documentation to verify reported financial balances.
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Your GoalsMake the process as easy as possible.
Constant and consistent preparation1
Monthly close process2
Strong internal controls3
Convenient and organized documentation4
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Audit Risk
AuditRisk
Inherent Risk
Control Risk
DetectionRisk= x x
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Monthly Close Process
Verify accuracy
Complete entries Review financial reports
Lock down data
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Variance Analysis
Large changes1
No changes2
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Variance AnalysisLook for deviations from trends.
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Protect Your Data
No changes to closed periods.
Restrict user access to make changes to financial data after it has been
reviewed and approved
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Approval Process
1. Bills
2. Checks over $X
3. Changes to closed periods
4. Journal entries
Require a second set of eyes on transactions.
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Journal Entries
1. Require approval
2. Restrict access
3. Keep support
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Journal Entries
Approval1
Support2
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Limit AccessRestrict access to areas of software to prevent:
Fraud1
Errors2
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Rental Income
Existence• Does the balance exist?
Rights• Have you earned the income?
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Security Deposits
Existence• Does the balance exist?
Completeness• Is this the total liability?
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First Check/Last Check
CompletenessLooking for gaps in check sequence.
• Enforce sequential check numbers
• Void checks instead of deleting
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Bank Balances
Existence
• Does the balance exist?
• Is it presented fairly?
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Bank ReconciliationReport
Makes the connection.
• Balance per bank
• Balance per books
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Trust AccountBalances
Property level balances.
• Details by property
• Total per books
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Keys to the Audit
Be your own auditor
Keep an audit trail
Establish internal controls
Lock down data
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QUESTIONS