Audit

From PCSAR

The audit of the books is done once a year prior to the Annual General Meeting.

1 Selection of auditors
2 Preparing for the audit
3 During the audit
4 After the audit
5 Audits

[edit] Selection of auditors

The auditors are two members of general membership, preferably not members of the board. These two members must be members of PCSAR not the CRG (bylaws section 16). They are appointed by the board (bylaws section 16) and report to the membership.

The board should pass an appointment motion of this form:

Suggested motion: Moved by _______________, seconded by _______________ to appoint _______________ and _______________ to act as auditors for the Society for the financial year ending August 31, ________.

[edit] Preparing for the audit

(Administrator for Treasurer) Prior to the audit, the following information should be provided to the auditors:

a copy of the auditors' report for the year prior to the audit
a copy of the year-end financial statements for the year prior to the audit
a copy of the audit year's year-end financial statements including
- balance sheet
- statement of income and expense
- deferred revenue reconciliation
the last bank statement prior to the year-end for all bank accounts
the last bill/statement prior to the year-end for all monthly accounts (e.g. credit card, Telus bills, phone.com, inReach)
the bank reconciliation statement
a list of all transactions for the year (Transaction Detail by Account)
the "A/R Aging Detail" report
the "A/P Aging Detail" report (to identify bills that may have been entered but never paid, or entered twice)
the "Transaction List by Supplier" report for the financial year (to identify bills that have been entered entered twice and paid twice).
a copy of the most recent inventory
the authorization to spend, which would be either
- a copy of the audit year's budget, as adopted by the board
  - plus a copy of the minutes adopting and amending the budget and authorizing expenditure limits
  - and any minutes authorizing expenditures over the budget
- or, a copy of all minutes for the year
a draft copy of the current year's Auditors' Report, ready for signatures

(Administrator for Treasurer) Arrange a time for the Auditors to meet with the Bookkeeper (Administrator or Treasurer), with the financial records.

[edit] During the audit

During the audit, the two auditors meet with the bookkeeper with all the financial records.

Together they verify that:

the current year's balance sheet balances
the totals of the income and expense sheet add up
the difference between the audit year's and previous year's balance sheet is the difference of the audit year's income and expense
the bank reconciliation statement matches the bank statement (compare Monthly review)
any regular bills that show a current balance (e.g. phone bills) match the balance reported in the books
all expenditures are authorized by either the budget or board meeting motion

The auditors will probe certain transactions, asking to see the paperwork associated with them. These transactions should include:

any transactions in the transaction list that seem odd.
transactions in the bank reconciliation statement that are unusually old.
a few random transactions

The auditors will review the previous year's auditors' report and check to see whether any of the concerns listed there should also be mentioned in the current year's report.

If there are concerns for the current year, the auditors will discuss with the book keeper whether the concerns can be addressed. If so, the auditors can reconvene after any additional information or changes has been provided.

After reviewing the books, the auditors will prepare an auditors' report. The auditors' report will state whether they believe the audit year's financial statements substantially reflects the financial state of the society at the financial year-end. If there are any outstanding reservations or concerns the auditors' report should include those. The audit year-end financial statements should be attached.

The auditors' report should be signed by both auditors.

[edit] After the audit

A copy of the auditors' report should be given to the bookkeeper and the board. Prior to or at the annual general meeting, the auditors' report (with the year end financial statements attached) should be sent to all members of the society.