Audit Readiness

From Audit Readiness to Audit Sustainment

Achieving a full financial statement unmodified audit opinion is a significant accomplishment given the unique DoD business environment and known material weaknesses currently preventing DoD from completing successful audits. St. Michael’s brings proven expertise and experience to overcome challenges, implement compliant and sustainable business practices, and prepare organizations to achieve an unmodified audit opinion. St. Michael’s specializes in supporting DoD Components that are preparing for financial statement audits.

Targeted Audit Readiness Testing
Universe of Transactions
Evidential Matter
Legacy & ERP Operating Environments

Targeted Audit Readiness Testing

  • Identify high risk areas for testing
  • Perform testing using an "auditor lens"
  • Assess if adequate supporting documentation exists to support key financial events and transactions
  • Document test results and clearly identify any deficiencies
  • Recommend corrective actions to address identified deficiencies
  • Provide support for the organization’s IPA examination or audit
  • Leverage test results to support the Statement of Assurance

Universe of Transactions

  • Analyze and document universe of transactions
  • Determine the location of transactions to be sampled for testing, audit or examination – including those outside of the General Ledger system
  • Identify reconciliations and interface controls supporting existence and completeness over the universe of transactions
  • Determine if adequate supporting documentation exists to support universe of transactions
  • Identify any data gaps
  • Reconcile the General Ledger to transaction detail
  • Tie specific financial statement line items to the corresponding transactions

Evidential Matter

  • Identify type and location of specific evidential matter supporting key financial events, controls, and transactions
  • Evaluate organizational ability to produce evidential matter in a timely manner
  • Perform risk based assessment of gaps in the ability to produce evidential matter
  • Develop strategy to quickly produce evidential matter in support of testing, audit or examination
  • Assess organizational structure and determine effective and efficient methods to produce evidential matter
  • Write detailed step-by-step desk guides to assist agency personnel with obtaining evidential matter for internal control and substantive testing

Legacy & ERP Operating Environments

  • Obtain complete inventory of all systems and micro-applications that could impact the control environment
  • Analyze feeder systems and associated interfaces
  • Understand technical architecture and transactional data flows
  • Integrate Standard Financial Information Structure (SFIS) standards where applicable
  • Evaluate service provider relationships and related MOU/MOA
  • Evaluate results of service provider SSAE No. 16 reports and impact to the agency
  • Perform Federal Information Systems Control Audit Manual (FISCAM) testing
  • Test Information Technology (IT) General and Application controls

Audit Readiness Key Success Story

On a current audit readiness effort, St. Michael’s provides support in three specific areas: (1) FIAR best practice recommendations are made based on business process analysis, (2) strengthening internal controls via Tests of Design (ToDs) and Tests of Effectiveness (ToEs), and (3) formalizing Corrective Action Plans (CAPs) to drive accountability. The client is benefitting from recommendations resulting from viewing the business process areas through the lens of auditors and highlighting areas of concern/room for improvement. We test controls by creating test plans that are documented on standard templates, identifying populations, choosing samples, and testing supporting documentation. For any failed control tests, we assist the agency in developing CAPs and performing follow-up tests as required. These CAPs offer a means of formal accountability as the agency strides toward audit readiness.

As a service-disabled veteran-owned small business (SDVOSB), we help government agencies achieve socio-economic contracting goals.