Information
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Audit Title
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Prepared by
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Location
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Date and Time
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Financial Review Team
Audit Engagement Profile
Audit Engagement Profile
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Division Manager
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Office Manager
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Installation Manager (Windows)<br>
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Installation Manager (Sun Rooms)
Auditor's Report
1.0 - Auditor's Report
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Signature
2.0 - Financial Audit Checklist
2.1 - Areas of Review
2.1.1 - Cash
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Bank Reconciliation<br><br><br>
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Verify bank balance against the ZBA balance per cash summary. Must agree.
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Verify ending adjusted bank balance to G/L.
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Does the outstanding check listing include check number, date, payee, and amount?
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Check the cash G/L transaction report and review vendor activity for payments to OM, DM, Cash, Petty Cash, etc.
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Obtain 2 deposits and trace cash to customer account and bank statement.
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Determine if there is segregation of duties during the handling / depositing of cash.
2.1.2 - Petty Cash
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Select at least one Petty Cash reimbursement and request backup. Review for proper approval, documentation and reasonable expenses.
2.1.3 - Accounts Receivable - Customer
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Run AR aging from ACCPAC. Check to see if cash is being applied to invoices.
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Review GL activity for AR accounts - look at AD, CR, DB transactions and any GL entries to make sure they are reasonable.
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Review Open AR for customers older than 6 months. Write off immeditely after six months have passed.<br>
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Verify that ACCPAC Aged Trial Balance and Access AR Reports agree and that the ACCPAC Aged Trial Balance agrees to the GL.
2.1.4 - Potential Uncollectible A/R
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Need to have a list of customers, this acct needs to offset the liability.<br>
2.1.5 - A/R Other Affiliate
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Verify what the AR balance is, and check the other affiliates payable balance.
2.1.6 - A/R Miscellaneous
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Review activity to make sure it agrees to the GL. Make sure we have any appropriate backup to support the balance.
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Check that Notes Receivable aren't included here.
2.1.7 - A/R Shareholder
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Make sure amounts related to taxes are properly documented. Need to know who the shareholder s.
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Look at payment activity - see if there has been regular payments, if the shareholder is still there.
2.1.8 - Interest Receivable
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Verify interest income/bank fees is booked correctly. If location owes interest on negative cash balance, should be accrued to account 2420.
2.1.9 - Employee Advances
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Look at employee names and verity that they are a current employee.
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Make sure there have been regular payments. If employee is gone or balance is not supported, write off to Bad Debt expense.
2.1.10 - Prepaids
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Review supporting schedule, look at detail for dates to make sure nothing is old or should have already been expensed.
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Need to include vendor name, original invoice amt, time period invoice covers, monthly expense amt.
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If any job related expenses are included, make sure that the job is on the Unistalled report.
2.1.11 - Deposits
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Review detail - should be fixed assets, or maybe utility deposits. Make sure detail is reasonable.
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If detail is Fixed Assets - find out why it is not set up - ALL assets that are complete need to be set up in BNA.
2.1.12 - Notes Receivable
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Verify that we have signed loan agreement on file.
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Agree ending GL balance to principal balance on amortization schedule and verify interest has been recorded properly during the year.
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Have there been regular payments within the last 3 months, if not we need to write off to Bad Debt.
2.1.13 - Fixed Assets
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Need to tie to the BNA schedules, both Asset value and Accum Depr. Tie out depr expense for the year (7280).
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Select items from FA register and physically inspect. Ensure that assets are in useable condition and located on company premises.
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Ensure DM/OM understands policies regarding Disposals, Additions, Transfers, etc.
2.1.14 - Accounts Payable (Referrals, Reimbursements)
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Obtain transaction details for a sample of 25 invoices comprising the balance for accounts payable. Check for appropriate approvals.
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Run AP Aged Trial Balance by Account Set and tie Trade AP and intercompany balances to the GL.
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Determine whether invoices are paid on time. Trace invoices to check stubs.
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Did the invoice contain enough information to support the allowance of the cost?
2.1.15 - Inventory
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Inspect premises to determine whether:
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Is inventory in good condition with adequate storage space.
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Arrangement of inventory is such that an accurate count is possible.
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Are scrap, obsolete and "Bonepile" goods adequately identified and segregated?
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Observe physical inventory counts to determine whether:
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Are counts made by someone independent of the custody and recording of inventory? Observe whether persons make test counts in all areas and review all areas where inventory is kept.
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Are appropriate procedures employed to control inventory movements (transfers, stock picking) during the count?
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Are there adequate procedures to ensure that all inventory is counted and that no inventory is counted more than once?
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Test the counting of inventory items by selecting items from the inventory sheets and perform an independent count.
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Determine whether bonepile (slow moving , obsolete, damaged, miss measured) inventory are identified and recorded by count teams.
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Test obsolete, slow-moving, scrapped or damaged inventory:
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Determine whether the obsolete or slow-moving items have been identified by reviewing a schedule of items that have shown little or no recent movement.
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Discuss with management quantities held in light of current production requirements and future marketing forecasts (i.e. Awnings, Spas etc.).
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Test costing of inventory:
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Gain an understanding of how "inventory change" is entered/calculated.
2.1.16 - Intercompany Payable
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Tie Intercompany statements to AP aged Trial Balance (CWM, Denver, Doors, ESI, Homeowners and other affiliates).
2.1.17 - Procurement Cards (Amex, Visa, Fuelman)
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Verify employee is active, in a position responsible for the acquisition of goods and services and has been approved by the DM to use the card.
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Verify that all transactions are supported with documentation (i.e. receipts, invoices).
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Review fuelman gas card statements for verification of appropriate charges.
2.1.18 - Accrued Payroll
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Employees time and attendance are properly reviewed, approved, processed and accurately coded for accounting. (Review timecards)
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Payroll data is properly reconciled, recorded in a timely manner and in the proper accounting period.
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Confidentiality of personnel data is maintained.
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Sample I9's and make sure they are filled out correctly and timely. Should be completed by every new employee. Separate folders for current and terminated employees.
2.1.19 - Accrued Bonuses
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Check Bonus list to see if they apply, then review calculation or recalculate to support. No employee bonuses should be recorded here. Growth, Ready One, and Phase In Bonuses only.
2.1.20 - Withheld Payroll Taxes
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Should be zero since payroll is on Fidelity. If there are old balances, review detail for reasonableness.
2.1.21 - WH Child Support & Garnishments
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Review support - need to have detailed amounts owed and employee affected. Verify balances are current and are not "old".
2.1.22 - Accrued 401k
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Should be zero, if there is a balance need to review the detail.
2.1.23 - Accrued Pers Prop & RE tax
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Review acct, if balance, make sure it is proper. If a location with Realty ownership, should have RE Tax accrual.
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Check that the current accrual is reasonable compared to the most current bills.
2.1.24 - Accrued Sales & Use Tax
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Review spreadsheet and supporting documentation. Recalculate tax return, verify accrual ties to the final return.
2.1.25 - Other Accrued Expenses
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Review backup. Verify all accruals are completed and appropriate.
2.1.26 - Accrued Dividends
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Some locations may have accrued dividend for the operator, if they get their dividends paid via payroll. Verify balance with Ben or Kevin.
2.1.27 - Customer Deposits
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Tie to uninstalled report, review Uninstalled report for old contracts to make sure they still have the potential to be installed.
2.1.28 - Sales Reserve Payable
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Need a detailed list of the outstanding balance by salesman. Review for old activity. Check to see if still current employee.
2.1.29 - Note Payable - LOC, Truck, Equip.
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Agree to statement from OPCO.
2.1.30 - Loan Payable - Third Party
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Review support for the balance and make sure balance is updated.
2.1.31 - Notes Payable - Shareholders
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If applicable, review balance and tie to amortization schedule.
2.1.32 - Dividends
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Verify dividend account balances for the year, by operator and Retailco, per Dividend Schedules (Ben).
2.1.33 - Capital/Equity Accounts
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Review activity. Nomal activity would be dividends, anything else should be questioned and reviewed.
2.1.34 - Testing Revenue
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Verify that those jobs not 90% complete have been backed out of Revenue, A/R and added to Uninstalled.
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Make sure that any expenses (labor, material) still needed to complete job are properly accrued.
2.1.35 - Test Subcontractor / COGS
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Verify that all jobs listed on current month install report have expenses in the subcontractor expense account. If there are jobs installed with no sub expense, ask where the expense has been booked, to ensure matching of costs to revenue.
2.1.36 - Testing Advertising
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Review statements from advertising vendors and make sure they ave the payable properly recorded.
2.1.37 - Testing Payroll Rec
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Recalculate the Payroll Reconciliation by verifying G/L account balances and Master file calculations.
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Tie out the payroll accrual.
2.1.38 - Financial Statements
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Review Balance sheet/Income statement for any abnormalities.
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If COGS from period to period are inconsistent, gain an understanding as to why/what the cause of the variance is.
2.2 - Document Review (Certificates/Permits)
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Sub Contractor Certificate of Insurance<br>
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Sun Room Permits - Actual Permit
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Lead Job Compliant - Actual Certificate<br>
2.3 - Interviews
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Division Manager
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Office Manager
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Installation Manager - Windows
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Installation Manager - Sun Rooms
3.0 - Operations
3.1 - Condition of Store (1-Worst to 5-Best)
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3.2 - Operations / Safety
3.2.1 - Safety Inspection
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