Audit Firm Selection and Qualifications

Audit Firm Selection and Qualifications

April 13, 2020 | Financial Management

In today’s Tip, we are discussing Audit Firm Selection and Qualifications.

Auditing is a process of reviewing a Charter’s financial records to decide if they are accurate and align with regulations, state laws and accounting standard. Audits are conducted by third-party external auditors that are CPA (Certified Public Accountants) or by an auditing firm.

External Auditors will examine a Charter’s accounting records and financial information to issue an assessment in the form of an audit report on the financial statements of the Charter. External Auditors conduct annual audits to make sure they fit auditing standards.

Even though all Charters in the state of Texas just completed the submission of the Annual Financial Compliance Report, Charter School Success recommends and encourages our managed service clients to have the Charter Board engage auditors early.

There are a limited number of qualified charter school auditors and limited time for them to complete engagements before the due date.  Typically, auditors need a minimum of 60 days from the start of field work to turn around a final audit report for board presentation and approval.

Our recommendation is to lock in your charter-qualified auditor about six months prior to the end of the fiscal year end.

When selecting an Auditor/Audit Firm, a Charter must ensure that their independent auditor/firm meets the following qualification:

  • A Certified public accountancy firm/certified public accountant that has a current valid license issued by the Texas State Board of Public Accountancy
  • Must meet all requirements provided by Texas Education Code 44.008, Texas Administrative Code 109.23 and all other requirements
  • Be a member in good standing of the AICPA Governmental Quality Center (GAQC)

You may verify an audit firm’s qualification by visiting the GAQC website to see if a firm is listed.

Governmental Audit Quality Center

The Governmental Audit Quality Center (GAQC) promotes the importance of quality governmental audits and the value of such audits to purchasers of governmental audit services. GAQC is a voluntary membership center for CPA firms and state audit organizations that perform governmental audits.

If the TEA division of financial compliance becomes aware of any deficiencies in the auditor or audit firm’s qualifications, they have the right to make the charter hire a qualified auditor and re-audit for that year.

For those Charters who have not selected an auditor, or will be in the market for one, we provide a list of Texas Charter School Auditors here  and a request for qualifications (RFQ) templet for our clients to use in helping to select an auditor.  We also serve as the auditor liaison for our managed service clients to ensure their audits meet FASRG.  See a sample Auditor RFP here.

Questions?