New Auditing Standards Will Impact the Conduct of Your Annual Audit - April 2007, Minnesota Counties

STATE OF MINNESOTA OFFICE OF THE STATE AUDITOR SUITE 500 (651) 296-2551 (Voice) 525 PARK STREET (651) 296-4755 (Fax) SAINT PAUL, MN 55103-2139 REBECCA OTTO state.auditor@state.mn.us (E-mail) STATE AUDITOR 1-800-627-3529 (Relay Service) April 2007 Article for Minnesota Counties ---------------------------------------------------------------------------------------------------- New Auditing Standards Will Impact the Conduct of Your Annual Audit By Rebecca Otto, Minnesota State Auditor In the last couple of years new auditing standards have been issued that could affect the nature, timing and extent of audit procedures performed by the auditor of your annual financial statements. One of the new standards, SAS 112, changes what and how results of the audit are reported. This new standard is effective in Minnesota, for audits of periods ending on or after December 15, 2006. How does SAS 112 affect your county? SAS 112 has more stringent reporting definitions that may have a significant impact on the number of findings and how those findings are reported. Your auditor must consider the “potential” magnitude of a control deficiency rather than the “known” magnitude. As a result, the number and type of written findings relating to internal controls may increase. In addition, the auditor will likely be required to gather more documentation and evidence to support those findings. This standard, as well as other new ...