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SPECIFIC AUDIT APPROACH (continued) <br />G. Approach to be Taken in Drawing Audit Samples for Purposes of Tests of Compliance <br />MMKR obtains transaction sequence information and uses a software program to generate a random <br />selection of sample items for purposes of its tests of compliance. The sample selected is provided to the <br />client prior to fieldwork whenever possible to allow client personnel sufficient time to gather the transaction <br />documentation for testing. However, some samples are selected during fieldwork to ensure an element of <br />randomness to the testing performed. This process is also incorporated into the tests of controls as required <br />by Statement on Auditing Standards Nos. 104-111 (SAS Suite). <br />IDENTIFICATION OF ANTICIPATED POTENTIAL AUDIT PROBLEMS <br />No potential audit problems are anticipated. If problems are identified during the audit procedures, the audit <br />principal is required to be notified by the audit team. If we do identify any potential audit problems during <br />the course of our audit, we will immediately report these concerns to city management in an effort to resolve <br />the problem and provide any additional requests for assistance from management we need to resolve our <br />concerns. <br />AUDIT REPORTS AND MANAGEMENT REPORT FORMATS <br />Sample formats for the reports expected to be issued in relation to the City's audit are included in <br />Appendix D. An example of the style and content of a typical MMKR management report is included in <br />Appendix E. <br />-18- <br />