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HomeMy WebLinkAboutPACKET Audit Committee 2017-01-30 Monday, January 30, 2017 8:30 a.m. – 10:00 a.m. Audit Committee Administration Conference Room 1. CALL TO ORDER 2. NEW BUSINESS a) Highlight responsibilities of town staff and auditors under GAAS b) Audit process and risk factors c) Accounting standard changes and updates d) Audit success factors and schedule e) Audit committee questions 3. ADJOURN Attachments: Attachment A: PowerPoint Presentation AGENDA 1       2 1/25/2017 WEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Investment advisory services are offered through CliftonLarsonAllen Wealth Advisors, LLC,  an SEC‐registered investment advisor.  | ©2016 CliftonLarsonAllen LLP Town of Estes Park 2016 Financial Audit – Audit Committee Meeting January 30, 2017 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Introductions Paul Niedermuller Principal Eric Miller Manager 2 3 1/25/2017 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Meeting Agenda • Highlight responsibilities under US Generally Accepted Auditing Standards (GAAS) • Audit process and risk factors • Accounting standard changes and updates • Audit success factors and schedule • Audit committee questions 3 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Audit Responsibilities under GAAS •CLA responsible for: – Expressing opinions on whether financial statements are in conformity with US GAAS in all material respects –Performing audit in accordance with required auditing standards – Communicate significant matters related to audit, information required by laws and regulations 4 4 1/25/2017 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Responsibilities (continued) • Audit in accordance with GAAS: –Does not relieve management of responsibilities – Consideration of internal control on basis for audit procedures, but not to opine on effectiveness of controls –Designed to obtain reasonable assurance about whether statements are free of material misstatement 5 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Audit Process and Risk Factors •Risk based approach –CLA performs risk assessment based on internal and external factors – Areas to incorporate from Audit Committee perspective • Understanding of systems and controls used by the Town of Estes Park –Example: Utility Billing System •Single audit based on the Town’s major programs 6 5 1/25/2017 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Audit Process (continued) •Element of unpredictability –Example: Benfords analysis over general disbursements 7 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Audit Process (continued) • Detailed review of employee overtime hours – Performed during 2015 audit •External fraud we have seen in last 3 months –Email phishing scams –ACH payments 8 6 1/25/2017 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Accounting Standard Changes •GASB 68 Year 2 –Estimated pension liability as of December 31, 2016 ◊Will be based off PERA actuary report •GASB 72 –Fair Value Measurement – Required current year implementation –Periods starting after June 15, 2015 –Increases disclosures related to fair value measurements (investments) ◊Level of fair value hierarchy ◊Valuation techniques ◊Organized by type of asset or liability reported at fair value 9 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Accounting Standard Changes (continued) •GASB 77 –Tax Abatement Disclosures – Required current year implementation –periods beginning after December 15, 2015 –Provide users with information about the nature and magnitude of the reduction of tax revenues through tax abatement programs –Tax abatement agreements resulting from ◊Agreements entered into by the Town of Estes Park and an individual or entity in which (a) the Town promises to forgo tax revenues to which they are entitled and (b) individual or entity promises to take a specific action after the agreement that contributes to economic development or benefits the Town 10 7 1/25/2017 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Accounting Standard Changes (continued) • Implementation is retroactive – Agreements entered into during prior year’s must be incorporated in 2016, if applicable •Disclosure requirements include –Brief description including names of government entering into the agreement and specific tax being abated –Gross dollar amount by which tax revenues were reduced during the reporting period 11 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Audit Success Factors • Financial audit and single audit to run concurrently • Commitment to prepared by client (PBC) list deadlines (including single audit requests) –As information is completed, send to CLA –Can perform work from office prior to final fieldwork •Date goals or benchmarks –From interim through report issuance 12 8 1/25/2017 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Audit Success Factors (continued) • Weekly status meetings – Status of CLA audit work (completed and open items) – Status of open PBC items •Timely and effective communication 13 ©2016 CliftonLarsonAllen LLPWEALTH ADVISORY  |  OUTSOURCING |  AUDIT, TAX, AND CONSULTING Audit Timeline •Interim – Week of February 20th –Risk assessment and controls – Audit areas completed by Finance Department ◊Cash, long‐term debt, single audit assessment, etc. •Final – Weeks of May 8th and May 15th – Substantive testing – Single audit testing • Audit Committee Meeting – June 2017 14 9 1/25/2017 ©2016 CliftonLarsonAllen LLP Audit Committee Questions? twitter.com/CLAconnectfacebook.com/ cliftonlarsonallen linkedin.com/company/ cliftonlarsonallen ©2016 CliftonLarsonAllen LLPCLAconnect.com Paul Niedermuller, Principal Paul.Niedermuller@CLAConnect.com Main: 303‐466‐8822, Fax: 303‐466‐9797 Eric Miller, Manager Eric.Miller@CLAConnect.com Main: 303‐466‐8822, Fax: 303‐466‐9797 10