How do I know if I will be audited and how long will the audit take?
An annual audit plan is reviewed and approved by the Audit Committee. We generally notify all departments involved in an audit prior to its start. Before commencing any audit work, an entrance conference is held to discuss the audit, estimate the time until completion, and offer management an opportunity to introduce any concerns or questions they may have. It is possible for an audit to be completed in several days; however, some can take several months. Audits vary in length depending on the scope, complexity, and specific audit objectives.
What are internal controls?
Internal control is a plan of organization and all the methods and measures used by a business to monitor assets, prevent fraud, minimize errors, verify the correctness and reliability of accounting data, promote operational efficiency, and ensure that established managerial policies are followed. Internal control extends to functions beyond the accounting and financial departments. Accounting controls encompass safeguarding assets and the accuracy of financial records. They are assigned to give assurance that transactions are properly authorized and are recorded to allow for financial statement preparation in accordance with GAAP.
Some examples of internal controls are: 1) separating the duties of handling cash and reconciling deposits; 2) periodic reconciliations between recorded assets on the general ledger and the physical assets that exist; and 3) separating the duties of preparing payroll and distributing paychecks. Separation of duties provides a system of checks and balances within a department and ensures that no one individual has excessive control and influence over a particular area of the department.
What are auditable activities?
- Compliance with Federal and State laws, as well as University regulations.
- Review of financial reports.
- Ensuring general ledger account balances agree with supporting transactions.
- Transaction activities such as payroll, revenue and accounts receivable, purchasing, accounts payable and disbursement, and property, plant, and equipment.
- Review of functions in offices such as Information Technology (IT), Procurement, Financial Aid, Student Accounts, and Human Resources (HR).
- NCAA compliance within athletics programs.
- Equipment inventory.
- Academic programs and academic course fees.
- Student academic transcripts.
- Are auditors looking for fraud when performing audits?
The Office of Internal Audit is not specifically searching for the existence of fraud when performing an audit. Generally the purpose of an audit is to ensure that a unit of the University has adequate systems of internal control, which will reduce the risk of fraud. If the Office of Internal Audit finds internal controls that are weak, we will perform additional tests and look for possible fraud.
- What are some examples of dishonest acts?
- Obtaining a benefit or advantage in violation of Binghamton University's conflict of interest policy.
- Improper reporting or falsifying financial transactions.
- Authorizing or receiving compensation for hours not worked.
- Authorizing or receiving compensation for goods not received or services not performed.
- Purposeful violation of Federal and State laws, University regulations, or contractual obligations when conducting business on behalf of Binghamton University.
- Forgery or unauthorized alteration of documents and/or computer files.
- Bribery or implied bribery.
- Unauthorized use of records, logos, trademarks, copyrights, etc.
- Falsification of time sheets or records.
- Theft or misappropriation of funds, supplies, property, or other University resources.
- Improper and/or wasteful use of resources.
- Falsification of reports to management or external agencies.
- What should I do if I suspect someone is involved in something illegal?
If you suspect fraud or other dishonest or questionable acts, do not try to question anyone or otherwise investigate the matter yourself. Report your suspicions.
- Can I ask Internal Audit for assistance when I'm not being audited?
Yes. The Office of Internal Audit generally performs formal audits; however, we also provide services to assist any department or office that may be in need of professional advice. Internal Audit assists University management on internal control matters and other items, and will be happy to provide you with a professional opinion on your specific area of concern.
- What is the relationship between the Internal Auditors and External Auditors who audit
Occasionally, Binghamton University is visited by External Auditors, including independent Certified Public Accounting firms, the Office of the New York State Comptroller, SUNY System Administration auditors, and Federal Auditors. Binghamton University's Internal Audit Department often works with External Auditors by organizing interviews with University staff, providing access to any records needed, and allowing them to review relevant work of our Department. The primary purpose of this is to expedite the External Auditors' visit to the University.
- Should I contact Internal Audit if an external party (e.g., State, Federal, accrediting
agency, or independent Certified Public Accounting firm) has scheduled an audit, program
review, or evaluation in my college or department?
Yes. We need to be informed of audits conducted by external parties. Please contact us to tell us about the scheduled review.
The Office of Internal Audit has a responsibility to protect the University from criticism by external auditors. In the annual audit plan, we try to anticipate areas that External Auditors will review in order to make necessary changes before we meet with External Auditors. We believe it is preferable for the Director of Internal Audit to work with you to address any concerns and improve University operations. In this respect, we can avoid reports from External Auditors regarding our operations that may portray the University in a negative way.