SAS 112 Presentation and Quiz (Payroll)
Summary: The Statement of Auditing Standards (SAS 112) is an accounting pronouncement that requires UCI to first identify key internal controls, and then to consistently document that these controls are operational. SAS 112 applies to our financial statements starting with the year ending June 30, 2007.
Standards and guidelines
SAS 112 establishes standards and provides guidance to the external auditors on communicating matters related to our internal controls about financial reporting identified in their audit of our financial statements.
To ensure that we do not have deficiencies in our internal controls that will be reported, we have identified our key controls related to financial reporting. Each key control has been documented on a separate template, to be used by the external auditors in their testing. Some of these controls reside centrally, and some reside in the campus departments.
The UCOP (UC Office of the President) website lists all key controls. The asterisk (*) in front of the control title indicates that the control is the responsibility of campus departments. All departments need to ensure that controls relating to their departments are functioning properly and are documented. For example, that reviews and approvals include the individual's initials and date performed.
Go to the UCOP SAS 112 website -
SAS 112 - Communicating Internal Control matters identified in an audit:
- Select Spreadsheet view
- Select 'Irvine' to view Document Summary for Irvine
The UCI Controller's Office provides general guidance on the implementation of Statement of Auditing Standards Number 112 (SAS 112).
- It establishes standards and provides guidance on communicating matters related to an entity's internal control about financial reporting identified in an audit of financial statements
- In the past, a list of findings was sent to the Chancellor by the external auditors. Now, the auditors are required to evaluate the findings and categorize deficiencies in control systems as:
- 'Significant deficiency' - more than a remote likelihood that the financial statements will have an undetected error of a material consequence
- 'Material weakness' - more than a remote likelihood that the financial statements will have an undetected error of a material consequence
- It requires the auditor to communicate, in writing, to management and those charged with governance, significant deficiencies and material weaknesses identified in an audit.
- One error out of a sample of 25 could result in a significant deficiency or material weakness.
- In the past, the auditors have identified key controls, now management must identify the key controls, and the auditors will review them.
- After management has identified the key controls, management must document them, and ensure they are functioning.
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