It Isn’t Effective Vs. Efficient For Auditing

Effectiveness and efficiency, on the surface, seem like they could be competing aims. Effectiveness tends to require a good bit of depth, while reduced time and cost are drivers of efficiency.

Selecting one or the other as a goal for an audit would seem to lead to two very different end product. That isn’t necessarily the case, however. During her session, “Tips for an Efficient Single Audit” at the 2017 American Institute of Certified Public Accounts (AICPA) Not-For-Profit Conference in National Harbor, Md., Kimberly K. McCormick, partner at Grant Thornton LLP’s San Francisco Bay Area Office, provided tips and considerations to both effectively and efficiently conduct an audit.

Among the topics discussed were:

  • Plan, assess risk, and conduct interim fieldwork. Debrief the prior year’s audit at the end of that year’s audit, don’t wait. Look to repeat what went right and learn from errors. Assemble an audit team and identify and manage information technology specialists. Set a fieldwork schedule and agree to the frequency of fieldwork meetings;
  • Look before you leap when it comes to sampling. Consider the audit’s objective, what the sampling unit is to test, how the client maintains records to test, how sampling units are tracked by the client, and the completeness of the test population;
  • Create an outstanding Prepared by Client (PBC) list. Send separate lists for interim and year-end fieldwork, number PBC requests and ask the client to number submissions accordingly, add columns for due dates and responsible parties, and update for new requirements such as uniform guidance; and,
  • Wrap up. Decide and document the severity of the exceptions and deviations and the severity of the Schedule of Findings and Questioned Costs (SFQC). Write and review findings while the underlying information is still available.