Research

Adam’s Research

"Ohio Department of Taxation" from Sept 21

Audits can be selected on expertise of various areas, however, most work

is divided equally amongst the agents.

We do have annual evaluations, however, there is no reward system for

work or whatever. We are a state agency with collective bargaining and

most promotions are done through interview processes (that are done by a

scoring system). If you do well on the interviews, you have a greater

chance for promotion. If you do great work, but are a poor interviewer,

it doesn't help you get promoted.

Follow up Question: Can you describe this scoring system a little more, do you have a template you could send?

We do have a scoring system for our interviews. Their is a grid and

list of answers based on technical knowledge and if the interviewee hits

the right buzz words, they will get those points. I know they are

changing these sheets and system and the sheets I would be apprehensive

to provide this to you.

We do and in many cases require training. There are various classes

offered in all the tax areas as well as non-tax, but development

training such as writing classes, workforce development, etc. are

required to some extent.

Follow up Question: Do your auditors have specific areas they are experts in? If so, are there different trainings depending upon what they expertise and what companies they usually audit?

Most of the agents are division specific. The training we have is offered to any one even outside the division just to broaden their knowledge base, but agents must for the most part take training in their division.

"Pam Robinson" <> from Sept 21

AUDITS ARE ASSIGNED BASED ON THE TYPE OF AUDIT,

THE SIZE AND DIFFICULTY OF THE AUDITEE AND THE EXPERIENCE OF THE

AUDITORS.

WE DO NOT USE A RATING

SYSTEM. EACH OPEN POSITION IS FILLED BASED ON THE APPLICATION AND

INTERVIEWS.

SINCE WE AUDIT USING THE YELLOW BOOK STANDARDS,

TRAINING IS MANDATORY. WE MUST HAVE 80 HOURS IN A TWO YEAR PERIOD WITH

AT LEAST 20 HOURS IS EACH YEAR.

Things to follow up on:

  1. Why not follow yellow book? Do other states not follow this? Show how important it is for big picture.
  2. Bring in more specified guidelines in auditing specific things. (This might be too much though as the company likes to be “free”)

From (

The Generally Accepted Government Auditing Standards (GAGAS), commonly referred to as the "Yellow Book", are produced in the United States by the Government Accountability Office (GAO).

The standards apply to both financial and performance audits of government agencies. Five general standards are included:

  • Independence
  • Due Care
  • Continuing Professional Education
  • Supervision
  • Quality Control

(the actual yellowbook)

(a 225 page rundown of any and every objective)

not extremely rules/guidance for the auditors but gives them the objectives needed

Other key points of our global audit methodology include:

  • Approximately 74,000 PwC auditors in the PwC member firms around the world use a single, global audit methodology which is designed to comply with all provisions of the International Standards on Auditing (ISAs) and align with new standards as necessary.
  • Our audit methodology is also updated at least annually to reflect quality improvements from our internal improvement review process.
  • This globally consistent approach to the audit means that regardless of location, PwC professionals can understand and evaluate your business using a single language and common methods. In turn, that enables a uniform level of quality in all our audits.

GAO’s Government Auditing Standards: The Yellow Book:

Use and Application of GAGAS

• Ethical Principles in Government Auditing

• General Standards:

- Independence

- Professional Judgment

- Competence

- Quality Control and Assurance

• Field Work Standards for Performance Audits:

- Reasonable Assurance

- Significance in a Performance Audit

- Audit Risk

- Planning

- Supervision

- Evidence

- Audit Documentation

• Reporting Standards for Performance Audits

- Reporting

- Report Contents

- Distributing Reports

The GAO was established by the Accounting and Budgeting Act of 1921 and is situated in the Legislative branch of the federal government, reporting to the Congress. In its beginnings, the mission of GAO was to provide Congress with an independent check of executive accounts and to report on violations of the fiscal statutes. Over the years the GAO has assumed additional roles in response to congressional needs. GAO currently describes its mission as supporting the Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people.

In 1969, a group of state auditors met with Comptroller General Staats and asked for help in compiling standards to improve state and federal auditing. In 1972, the Comptroller General issued the first edition of the Standards for Audit of Governmental Organizations, Programs, Activities & Functions, which came to be known as the “Yellow Book.” In later years, GAO gave the book a more concise title, Government Auditing Standards, and updated its guidance periodically. Since the initial publication in 1972, Generally Accepted Government Auditing Standards (GAGAS), more commonly referred to as the “Yellow Book,” has undergone five major revisions through July 2007. The revisions have been made to respond to changes in the government accounting and auditing environment and to changes in other professional standards. The Yellow Book provides standards and guidance for financial audits, performance audits, and attestation engagements.

The IIA was incorporated in 1941 and evolved as an answer to the growth of internal auditing and in response to new management needs resulting from the increasing size and complexity of corporate and government organizations. The Institute issued a statement of responsibilities in 1947 and approved a code of ethics in 1968. The first Certified Internal Auditor examination was administered in 1974 and The Institute’s first standards for the professional practice of internal auditing were issued in 1978. Between 1978 and 1998, the original five general and 25 specific standards were updated and interpreted through 18 Statements on Internal

Auditing Standards (SIAS). In 1998, The Institute’s Governing Board appointed a Guidance Task Force to review the continued applicability and relevance of the standards some 20 years after first issuance. As a result, the Task Force recommended a new definition of internal auditing, a Framework for the Professional Practice of Internal Auditing, new Attribute and Performance Standards for internal auditing, and implementation standards for assurance and consulting services. The IIA’s definition of Internal Auditing, Code of Ethics, International Standards for the Professional Practice of Internal Auditing, Practice Advisories. Practice Guides, and Position Papers are contained in the International Professional Practices Framework, more commonly referred to as the “Red Book.”

The Institute has more than 160,000 members with global headquarters in Altamonte Springs, Florida. Throughout the world, The IIA is recognized as the internal audit profession’s leader in certification, education, research, and technological guidance.

Both The IIA and GAO follow a due process procedure in establishing new and revised auditing standards. Both organizations issue exposure drafts of the proposed new standards for public comment. For GAO, the Comptroller General appoints an Advisory Council on Government Auditing Standards to provide advice on issues related to Yellow Book standards. The Council consists of auditing and accounting professionals at the federal, state, and local government level, users and preparers, academics, and private sector CPA firms that perform government audits. For the Yellow Book, the Comptroller General relies heavily on advice provided by the Council, but the final responsibility for issuance of the standards rests

-(from Wapedia):

Yellowbook standards apply to both financial and performance audits of government agencies. Five general standards are included:

  • Independence
  • Due Care
  • Continuing Professional Education
  • Supervision
  • Quality Control

-(from PwC):

Other key points of our global audit methodology include:

  • Approximately 74,000 PwC auditors in the PwC member firms around the world use a single, global audit methodology which is designed to comply with all provisions of the International Standards on Auditing (ISAs) and align with new standards as necessary.
  • Our audit methodology is also updated at least annually to reflect quality improvements from our internal improvement review process.
  • This globally consistent approach to the audit means that regardless of location, PwC professionals can understand and evaluate your business using a single language and common methods. In turn, that enables a uniform level of quality in all our audits.

-(from Tammy Sorensen):

The agent is supposed to follow the audit program. Some follow it to the letter and others fill in their initials once they are done auditing and are turning the audit in. The audit program speaks in generalities and does not really touch on specific audit situations. They only thing that the agent truly has to fall back on is the statute. There really isn't anything else they can fall back on as to how to go about the process. An agent is always welcome to call their manager also.

From PwC:

How public accounting firms take on the following:

  • Establishing an objective way to rate and rank employees for their work that fosters individual growth but also ties directly to goals of the company.
  • Establishing an objective way to rate and rank employees without brining hostility and negative competition to the team and office culture.
  • Develop a better program for promotion and raises.

Coaching and professional development

1. Investing in relationships

2. Enhancing Value

3. Sharing and Collaborating

4. Putting myself in others' shoes

Investing in our people

At PricewaterhouseCoopers (PwC), we believe in helping our people reach their full potential. That's why ongoing learning and teaching are integral to the PwC culture. We ensure our people receive leading-edge technical training as well as skill-building programs and experiences. We also assign each employee a coach to guide them in the areas where they can continue to grow and develop. Coaches provide feedback, advice and encouragement regularly. Through Everyday Coaching and Learning and Education, we provide enriching developmental opportunities for our people. This kind of investment is not only good for our people, it's good for our business. As we our people improve, so does our overall service to clients. Here's how it works:

Everyday coaching

Our vision of being distinctive will be achieved when we drive the very best of coaching skills and behaviors into our everyday connections. In order to support professional development and create a teaching culture, we have defined our efforts through "Everyday Coaching." While formal coaching is a structured process, informal coaching happens everyday at PwC. These brief, spontaneous coaching conversations are intended to share knowledge, enhance skills, improve performance and further career development. To help raise the level of awareness of the importance of everyday coaching, we have produced a video series of reality-based themes which were delivered through Firmwide e-mail.
Formal coach-coachee meetings, which are facilitated through our Performance Coaching and Development tool, happen at least three times a year. At the start of the fiscal year, the coach and coachee establish a development plan. Mid-year, they conduct a progress check. At year-end, they have a formal review to discuss goals, career direction, strengths and challenges, feeding into the following year's plan. Through informal and formal coaching, our people receive ongoing feedback essential to their growth and development.

Learning and Education (L&E)

At PwC, we expect our people to continuously develop themselves. By combining on-the-job training, job rotations, and international assignments with innovative training approaches, we enable our people to take charge of building successful careers. Here, that starts with developing one's technical and project management expertise. It also requires developing valuable skills in the areas of relationship management, leadership, teaming, business perspective, and communication.
To support our staff in their continuous self-development, we offer tuition reimbursement, plus thousands of classroom training sessions and eLearning courses throughout the year, and conferences that bring together people from PwC offices around the globe. It is in this type of continuous learning environment that PwC people truly thrive. Here are some examples of our programs:

  • Genesis Park: A five-month residential program for high potential managers worldwide to focus on real-life issues facing the firm. Attendees receive personalized feedback and coaching, and build strong cross-firm relationships.
  • SOAR (Starting Out Able and Ready): A series aimed at newly admitted U.S. partners consisting of self-assessment and development planning.

Ulysses: A social responsibility program matching top talent to sustainability projects around the world, yielding a learning journey which is both outward-looking and inwardly reflective.

Audit Programs and Training

Max’s Research

[this is what I used to create the YellowBook BSC…it came from Josh’s textbook]

Types of Governmental Audits and Other Engagements

  • Financial audits
  • The primary purpose of financial statement audits is to provide the reader with reasonable assurance through an independent opinion (or disclaimer of opinion) that an entity’s financial statements are presented fairly in accordance with recognized criteria (i.e. GAAP).
  • Attestation engagements
  • The primary purpose of an attestation engagement is to provide an examination, a review, or an agreed-upon procedure report on a subject matter or on an assertion about a subject matter.
  • Examination- the purpose is to express an opinion on whether the subject matter is examined is based on (or in conformity with) the recognized criteria or the assertion being made is presented (or fairly stated) based on the recognized criteria.
  • Review- the purpose is to express a conclusion about whether any information indicates that the subject matter reviewed is not based on (or not in conformity with) the recognized criteria, or the assertion is not presented (or not fairly stated) based on the recognized criteria.
  • Agreed-upon procedures- the purpose is specific to the procedures the auditor performs on an agreed-to-subject matter
  • Performance audits
  • The purposes of performance audits vary widely and include assessments of program effectiveness, economy, and efficiency; internal control compliance; and prospective analyses.
  • GAGAS performance audits are engagements that provide assurance or conclusion based on an evaluation of sufficient and appropriate evidence using stated criteria.
  • GAGAS performance audits provide reasonable assurance concerning the conclusion the auditor reaches

Generally Accepted Government Auditing Standards (GAGAS)

  • General standards
  • Independence standards: the audit organization and the individual auditor must be free from personal, external, or organizational impairments to independence.
  • Professional judgment: auditors must use professional judgment in planning and performing audits and attestation engagements and in reporting the results
  • Competence: the staff assigned to perform the audit or attestation engagement must collectively possess adequate professional competence for the tasks required.
  • Quality control and assurance: the audit organization must establish a system of quality and have an external peer review at least once every 3 years

[an e-mail from Keith Akers in Maryland]

Date: / Mon, 05 Oct 2009 05:56:07 -0600 / 24 of 51 24
From: / "KEITH AKERS" <>
Subject: / Re: audit inquiry
To: / "Maxwell J Sarlo" <>

Dear Mr. Sarlo:

I have the following responses to your three-part question.

Is the training we offer mandatory? The short answer to this question is "yes", but I think some background explanation is in order.

As mandated by Ohio Civil Service Classification Specifications (class specs), there is required training in place for each Tax Auditor Agent (TAA) level. I have attached the class spec training language for an entry level TAA (TAA1) and a higher level TAA (TAA3) to provide you examples of these requirements and how they differ from auditor level to auditor level.

Auditor levels range from TAA1 through TAA5. Management positions exist above TAA5 for which no mandatory training requirements are described in the civil service class specs, the thought being that managers should not have to be required to complete training related to their jobs. Instead, managers are to voluntarily participate in all training directly or indirectly related to their jobs.

TAA1's must successfully complete all their mandated training in two years to be eligible for an automatic reassignment (aka a nonprobationary promotion) to a TAA2. Failure to successfully complete the mandated training within the two-year time period can result in the delay of an automatic reassignment.

What type of training do you offer your auditors? We offer both tax technical and soft skills type instructor-led and on-line training. Most tax technical training is developed entirely inhouse, although I work closely with the IRS to take advantage of any opportunities where their courses would directly/indirectly benefit our auditing efforts. Unlike soft skills training, tax technical training cannot be purchased off the shelf and modified to fit Ohio Auditors.

Essentially the civil service class specs are the basis for the TAA Curriculum which is what I manage for the Audit Division. Curriculums exist for each TAA1-TAA5 level. I have attached an example of the current curriculums for TAA1's and TAA3's so you can compare the class specs and curriculums for the same auditor levels.

Curriculums do not change unless there are changes to the class spec language. To change the class spec language, it takes approval from our Department of Administrative Services and sign off by the employee union. We have done this once since the inception of the training requirements in July 2001 which is when the Ohio Tax Department was restructured.