Having now received the audit letter from a state informing you that you have been selected for an AUP examination or, even worse, a notification from a third-party audit firm claiming to represent 15 or more states, you take a deep breath and possibly ask yourself, Why me and what does this all
mean?
The answer to the question “why?” is, because the state or states participating in the examination have “reason to believe” that there has been an under-reporting, inconsistent reporting, or lack of reporting and now want an opportunity to obtain the presumed unreported property for their state.
Pre-Audit Preparation
Mastering the facts is a critical step during the Pre-audit period. The more facts that can collectively be learned about your organization’s prior compliance process, acquisitions and divestitures, system purges, records retention policy, and accounting/ERP system updates will help identify areas of potential exposure and concern.
At Hall & Associates, we pride ourselves on working with our clients to “get it right.” With more than 35 years of diverse accounting, financial, tax, audit and forensic experience, we are prepared to provide your team with seamless representation through the entire audit process. Companies that have attempted to “go it alone” do not typically fare well and, accordingly, securing competent representation is one of the first steps in achieving successful results.
Typical Audit Representation Steps:
Project kick-off meeting with process owners
Obtain understanding of prior reporting history
Determine scope of business units included in review
Determine quality of records and data
Where appropriate, enter into Voluntary Disclosure
Agreements (“VDAs”) with identified states
Where required, develop sampling methodology
Perform data analysis
Perform remediation
Perform due diligence where required
Perform due diligence where required
Obtain client approval on final exposure amounts
Prepare initial filings for the states
Prepare VDA package/voluntary remittance package
for the states
Where applicable, obtain closing agreement
Respond to inquiries from state