The Audit Process Chapter 9 Presented by Jessica C Smith, Manager KPMG LLP KPMG LLP

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 2 Overview – The Audit Process Role of the auditor Role of the campus Planning and communication Campus preparedness – having all required items ready on first day of fieldwork! Directly impacts the ability to stay “on track” with required audit timeline and CO submission deadlines

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 3 The Role of the Independent Auditor Provide PBC List (contained in Chapter 9) Financial statement audit A-133 audit (higher and limited scope) Some Exhibits are mandatory this year (indicated on exhibit index) KPMG campus partners to communicate campus audit preparedness to Chancellor’s Office (CO) on first day of fieldwork Planning meeting/entrance conference held All PBC schedules provided in binder or on flash drive Completed and management approved reporting package provided to KPMG campus team

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 4 The Role of the Independent Auditor, cont. Communicate progress and any difficulties or issues encountered during the audit, including potential internal control deficiencies and single audit findings, to: Campus management prior to weekly CO meetings CO via weekly CO meetings with campus partners KPMG Systemwide Team via weekly progress reports Meet deadlines set by CO, campus, and audit team (refer to audit timeline for key dates)

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 5 Understanding the Role of the Campus To have all requested schedules, including the completed and management approved reporting package, PRIOR to the first day of fieldwork (refer to Engagement Team Phone List for fieldwork start dates) Provide suitable workspace for team (phone, internet connections, and access to printer) Designate campus contacts for financial statement and A-133 audits Meet deadlines set by CO, campus, and audit team (refer to Audit Timeline for key dates) Constant communication with the audit team

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 6 First Day of Fieldwork – Submission to KPMG Campus Team All PBC schedules – to be provided in a separate set of PBC binders with indexing of all schedules and use of flash drive (refer to Chapter 9) Completed and approved reporting package Campus analytical review (fluctuation analysis - see example) by financial statement line item (part of reporting package) in WORD Document

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 7 Key Deadlines – Submission to CO Auxiliary organizations’ audited financial statements, including supplementary information schedules – September 30, 2008 Campus reporting package (includes financial statement and A-133 audits, including FISAP) – October 16, 2008 Campus analytical review (fluctuation analysis) by FS line item – October 16, 2008 A-133 findings – November 5, 2008 Campus draft stand-alone financial statements (including management approved MD&A) to KPMG for review – November 24, 2008

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 8 Planning Meeting/Entrance Conference Campus and KPMG team introductions Current year activity and issues Scope of audit PBC list clarification Confirmations Key deadlines Auxiliary organizations Reporting package Management’s discussion and analysis Stand-alone financial statements Confirm fieldwork timing

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 9 Sample Schedules

May 2008 GAAP Reporting Workshop © 2008 KPMG LLP, the U.S. member firm of KPMG International, a Swiss cooperative. All rights reserved. Printed in U.S.A. KPMG and the KPMG logo are registered trademarks of KPMG International. 10 Questions