Telecommunication Audit - Preliminary Audit Program

SCOPE

[Organization] Telecommunications - Billing September 1, 199X to August 31, 199X.

OBJECTIVES

1. To determine compliance with applicable policies, procedures, and regulations.

2. To test the integrity and reliability of interfaces with financial reporting system (FRS) and budget reporting system (BRS).

3. To determine the existence of and adherence to internal controls over the billing and related processes.

4. To determine the reliability of financial and operational information.

5. To determine the efficiency, economy, and effectiveness of operations related to the scope of the audit.

PRELIMINARY SURVEY

1. Review and update permanent file.

2. Review current Federal, State, and University guidelines applicable to telecommunications.

3. Inquire of and review any reports or audits or other reviews conducted.

4. Obtain an understanding of auditee's department/function:
   • obtain organization chart and/or job descriptions
   • obtain any statements of mission, goals, or operational objectives
   • interview key departmental personnel to obtain useful information (necessary for documenting department's profile), and
   • inquire about changes in past 3 years in auditee's program, organization, procedures, and level of technology.
5. Review department procedures manual(s).

6. Obtain or develop department financial information.

7. Determine audit objectives and scope and review with the Director.

8. Determine which audit programs and ICQ's should be used and whether modification is needed. Flowchart unique departmental processes.

9. Review level of automation and accessibility of computer files to determine if specific computer tools are needed.

10. Prepare engagement letter and schedule an entrance conference. Hold an entrance conference with the head of the department to be audited and designated attendees:
    • go over audit life cycle and discuss audit process;
    • discuss the tentative scope of the audit;
    • discuss audit objectives; and,
    • inquire if there are specific areas of management concern.

FIELDWORK PREPARATION

1. Based on information obtained from the preliminary survey and entrance conference, complete the department audit program:
   • finalize scope and objectives;
   • revise existing audit programs and ICQ's as necessary;
   • add or delete additional steps to audit programs; and,
   • prepare an audit time budget.
2. Obtain approval of the audit program and budget from the Director prior to commencing fieldwork.

3. Request automated reports from DP personnel as needed (or use available data retrieval tools to extract automated reports as needed).

4. When using audit programs that require confirmation letters, remember to send them out as early as possible to avoid delaying the audit project.

5. Review, as necessary, audit sampling methods with the Director.

6. Perform audit fieldwork using separate, generic programs as applicable.

7. Remember to:
   • review internal control throughout the audit;
   • devise, perform, and document any additional steps considered necessary based on the results of the review of internal controls; add these steps to the audit program and obtain approval;
   • document all findings on Point Disposition Sheets and review with auditee; note auditee comments;
   • obtain approval from the Director for any modifications needed to the time budget and audit scope as a result of major problems encountered during fieldwork; if significant finding needs immediate management attention, discuss with the Director.
8. Perform billing and accounts receivable audit program for Telecommunications.

9. Select a random sample of workorders to insure proper documentation exists for issuing authorization codes and activation / deactivation of previously issued Telecomm codes.

10. Select a random sample of credit card numbers from the Telecomm data base and trace to source document to ensure the validity of the numbers.

11. Complete the system control ICQ.

12. Review the appropriateness of the levels of accessibility to Telecomm's Prime Computer system and System 85 Switch via password authorizations.

13. Verify that FRS and BRS programmers at [Organization] cannot write to the billing tapes by determining the security access to their high level qualifiers.

14. Assess the physical security of the premise by comparing police report to premise. Also consider physical access to computer hardware and switch.

15. Verify that there are clear and up-to-date written procedures for each operation.

16. Determine if the department and/or the University meets established goals and objectives by reviewing management reports and other measures of achievement and productivity.

17. Review reconciliations and other tracking to determine if the interfaces between the systems are reliable.

WRAP-UP

1. Clear any open points.

2. Title, index, initial, and date workpapers.

3. Summarize the results of all tests performed in the applicable workpapers. Include calculation of actual error rate for each attribute tested. Determine if the actual error rate is acceptable and document your conclusion.

4. Prepare audit memo(s) outlining audit work performed.

5. Develop audit findings and recommendations when applicable.

6. Submit audit workpapers and draft report to the Director for review.
7. Clear review notes. Go over the review notes with the Director to ensure that all points are cleared.

8. Distribute draft audit report. Obtain and review responses. Note your receipt of the responses. Issue final audit report with responses included.

9. File report and workpapers - Audit Control Sheet.

10. Verify the scope percentage breakdown was accurate and notate to the Director the "significant" recommendations.

11. Perform follow-up in approximately six months following the date of final report distribution.

12. Close the file.