Finance and Accounting - External Reporting
Effectiveness and efficiency of operations
A. Critical forms, records, and processing areas and procedures are safeguarded from unauthorized access and hazards.
- Are the duties of updating standing data segregated from the maintenance of financial records (such as posting or authorization of adjustments and reconciliations)?
B. Disclosures are complete and accurate.
- Has a checklist of required disclosures been established based on prior year financial statements, minutes of the board of trustees meetings, review of new regulatory pronouncements, and discussions with legal counsel and outside auditors?
- Are developments subsequent to period-end discussed with appropriate personnel, such as losses of major customers, cancellations of significant business, commitments or plans for major purchases, and significant divestitures?
Reliability of financial reporting
A. Translation and consolidation of financial statements are complete and accurate.
- Are accounting policies reviewed for significant transactions annually to ensure changes in circumstances are appropriately reflected in the recorded entries?
- Is only one recurring set of period end consolidation/elimination entries maintained and a one-to-one check performed against the actual recorded journal entries to validate completeness?
- Does that management decide on the appropriateness of including/excluding a newly acquired subsidiary in the consolidation, provide supporting documentation, and review its decision annually?
B. Financial statements prepared for external distribution are fairly stated and reliable.
- Is information imported electronically from the general ledger to the financial reporting system after consolidation and appropriate personnel appointed to review it for relevance and accuracy?
- Has a practical and realistic revenue recognition policy been established that reasonably reflects the completion of the earnings process and an estimate of the revenue earned?
- Has a process been implemented to evaluate specific liabilities and assets and make the evaluation of the account balances part of the operating procedures when preparing financial statements?
- Are duties (such as the preparation of top-side entries and the review and approval of financial statements) segregated to ensure integrity in the preparation of financial statements?
Compliance with applicable laws and regulations
A. The University’s reporting complies with applicable laws, regulations, and contracts.
- Are activities of the FASB and EITF standards setters monitored appropriately (for example, through newsletters, databases updating activities of standards-setters, participation in industry and professional committees, and consultation with outside experts)?
- Are all decisions about accounting policies supported with current documentation as well as the approval of high level accounting managers and external advisors consulted, as appropriate?
- Do accounting and senior management perform a quarterly review of financial statements
to verify compliance with accounting policies and
generally accepted accounting principles?