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Office of Audit and Control

Frequently Asked Questions

Q: I was informed that I am going to be audited, now what?

If the audit is an internal one, the Internal Auditor will contact you with details on timing and needs. If the audit is from an external or governmental source, contact the Office of Audit and Control. The Auditor will co-ordinate all external audits and inform you of the timing and needs of the auditors.

Q: How long will the audit take?

Audits can last from one or two days to several months depending on the processes being audited. After the planning phase is finished, we will give you a reasonable estimate of the time needed to complete the audit.

Q: What will the Auditor need from me?

Cooperation and communication between the area being audited and the auditor are essential. Requirements will vary by the type of audit being performed. Generally the auditors will want to see any department policy and procedures documentation, samples of forms used and reports generated. If procedural documentation does not exist, you should be prepared to answer detailed questions concerning the operations and flow of work in your area. The auditors will usually sample work performed by requesting and reviewing files, vouchers and reports. They will also inquire about the status of past findings and corrective actions taken since the last audit. If you are having trouble collecting any requested materials for auditors, inform them of the problems as soon as they are known. When performing tasks or fulfilling requests for outside auditors, please inform the Internal Auditor of the status of this work.

Q: Will the audit disrupt my department's everyday activity?

Every effort to minimize any disruption will take place and we will cooperate with you whenever possible to ensure a smooth process.

Q: Will I know the results of the audit?

In the case of internal audits, at the end of the process a report will be written. This report will be reviewed with the area and/or requesting management before it is finalized. All management in the reporting chain of the area audit will receive a copy of the final report. Copies of reports are also sent to the President and the Chair of the Audit Committee of the Board of Trustees. In the case of external audits, the University will receive an official report at the end of the process. These reports are usually addressed to the President of the University. The Office of Audit and Control will inform affected areas of the results of external audits when they are known.

Q: The audit is over and I've received the report, am I finished now?

If the report contains no finds or recommendations, you are finished, just keep up the good work. If there are findings and/or recommendations, a response will be needed from area management. If actions need to be taken there will be a follow up from the auditor at a later date to determine if those actions were taken.

Q: What are good internal controls and why are they important?

Internal controls are good business practices that assist in achieving the University's objectives encompassing cost effective, timely and flexible measures. Good internal controls help each department operate more efficiently and effectively with assurances that procedures are adequately adhered to and assets are protected.

Q: Are there different kinds of internal control?

Internal controls can be classified as preventive or detective. Preventive controls discourage errors or irregularities: computer applications preventing invalid entries; reading and understanding University policies helps prevent violations; and a director's review of purchases for validity prevents inappropriate expenditures. Detective controls identify an error or irregularity after it occurs: an exception report detects and lists incorrect or invalid entries or transactions; a comparison of validated cash receipts to the financial statement detects erroneous accounts; and the director's review of long distance phone charges will detect abuse.

Q: What can jeopardize internal control?

Many circumstances may compromise the effectiveness of internal control but these are the most common and serious that warrants special attention:

  • Inadequate segregation of duties - separating responsibility for physical custody of an asset from the related record keeping is a critical control.
  • Inappropriate access to assets - safeguards should be provided for physical objects, restricted information, critical forms and updated applications.
  • Inadequate knowledge of University policy - personnel should adhere to and stay abreast of changes in policy and understand their responsibilities.
  • Form over substance - controls can appear to be well designed but still lack substance, as is the case with required approvals. If the approver signs off without reviewing the document, the control is ineffective.
  • Control override - exceptions to established policies are sometimes necessary to accomplish specific tasks, but can pose a significant risk if not effectively monitored.
  • Inherent limitations - limitations may obstruct efforts to properly segregate duties, which require the implementation of compensating controls to ensure that objectives are achieved.

 

 


Lincoln University of the Commonwealth of Pennsylvania
1570 Baltimore Pike, P.O. Box 179, Lincoln University, PA 19352 \ (
484) 365-8000