Section 35.12. Auditor requirements.

 

(1)   Independence requirements. An auditor engaged by a school to meet the requirements under this chapter and s. 119.23 , Stats., shall comply with the standards of the American Institute of Certified Public Accountants, including all of following:

(a) An auditor shall comply with the requirements of s. Accy 1.101 .

(b) An auditor shall obtain the school's trial balance required under s. PI 35.11 (2) if the auditor is completing compilation or review services.

(c) Except as provided in par. (d) , an auditor may not post or prepare for posting typical reoccurring financial transactions to the school's general ledger, including cash receipts and disbursements, invoices or billings for services, billings from vendors and suppliers, and payroll activity.

(d) An auditor shall obtain written approval of the school's management prior to posting adjusting, correcting, and closing journal entries to the school's general ledger. An auditor's working papers shall document evidence of management approval for all such entries resulting from a financial statement compilation, review, or audit.

(e) If an auditor assists in the preparation of a school's budget, the auditor shall do all of the following:

1. Comply with s. Accy 1.201 (1) (e) regarding forecasts.

2. Identify that such assistance was provided, if required by the department.

(2)   Inquiries. An auditor shall promptly respond to inquiries or requests made by the department. The auditor shall notify the school of any inquiries or requests made by the department and the auditor's response.

(3)   Working papers retention. An auditor shall retain working papers relating to the enrollment audits under s. PI 35.07 , the audit required under ss. PI 35.09 and 35.10 , and the report on fiscal and internal control practices under s. PI 35.13 for at least 5 years from the due date of the financial audit, unless the department or a law enforcement agency requests the auditor to retain working papers for more than 5 years.

(4)   Working papers review. An auditor shall permit the department to review audit working papers prepared in support of the enrollment audits under s. PI 35.07 , the audit required under ss. PI 35.09 and PI 35.10 , and the report on fiscal and internal control practices under s. PI 35.13 . The auditor shall promptly provide copies of working papers the department requests.

(5)   Auditor peer review report. An auditor completing any of the audits and agreed upon procedure reports under s. 119.23 , Stats., or this chapter shall submit the auditor's peer review required under s. 442.087 , Stats., to the department within 30 days of the report's issuance.

(6)   License requirements.

(a) The auditing firm that is engaged by a school to complete the audits and agreed upon procedure reports under this chapter or s. 119.23 , Stats., shall be licensed as a certified public accounting firm by the accounting examining board under ch. 442 , Stats.

(b) The individual auditor who signs the engagement letter for the audits and agreed upon procedure reports under this chapter or s. 119.23 , Stats., shall be a licensed certified public accountant by the accounting examining board under ch. 442 , Stats.

(7)   Auditor bar.

(a) The department may bar an auditor who fails to timely and properly fulfill the auditing and reporting requirements of this chapter or s. 119.23 , Stats.

(b) An auditor who is barred under par. (a) shall not complete accounting, auditing, or other reporting requirements for any school participating in a program under ss. 115.7915 , 118.60 , and 119.23 , Stats., until such time as the auditor submits to the department evidence acceptable to the department that the auditor has made procedural changes to the manner in which the auditor conducts an audit and has successfully completed professional development training that will enable the auditor to comply with the requirements of this chapter, chs. PI 48 and 49 , and ss. 115.7915 , 118.60 , and 119.23 , Stats.

CR 16-004 : cr. Register July 2016 No. 727 , eff. 8-1-16; correction in (3), (7) (b) made under s. 35.17 , Stats., Register July 2016 No. 727 ; correction in (7) (a) made under s. 35.17 , Stats., Register December 2016 No. 732 .