Preparing

for the

Annual Audit

Session Overview

• What is an audit

• What is the auditor’s role

• How to prepare for the audit

• Pre-audit analysis

What is an audit

• Systematic and independent examination to provide assurance to user

• Verifies documentation for completeness & accuracy

• Reviews internal controls

The Audit Report

Parts of an audit report:• Cover letter stating the opinion• Financial statements• Notes to the financials

Auditor’s Role

• Examine on a test basis documentation

• Test timing

• Request information and confirmations

• Review assets, records, minutes.

Preparing for audit

• Advance work will shorten the audit time, reduce questions and may cut costs.

• Contact the auditor early to schedule time.

• Inquire about requirements letter.

Basic Info

• Full general ledger

• Balance sheet /Statement of Financial Position

• Income statement / Statement of Operation

• Trial balance

Balance Sheet Schedules

• Cash and cash equivalents

• Receivables

• Investments

• Other assets

Balance sheet - liabilities

• Accounts payable

• Deferred or unearned revenue

• PST & GST

• Debt / long term loans

Revenue

• Preparation of grant confirmations from funders.

• Deposit books/receipts

Expenses

• Employee expenses.

• Cheques and expense requisitions

Pre-audit analysis

• Review revenue & expenses

• Scan of general ledger

Accountability requirements

• Submission no later than 90 days after year-end.

• Recognition of support from Sport Manitoba and Manitoba Lotteries

• Auditor must be from a recognized professional accounting body.

• Submit a letter to management.

Responsibilities of Association

• Select and recommend Auditor

• Appointment of audit at AGM

• Confirm requirements

• Follow up on post audit adjustments