Effective Audit Testing in an Indirect Cost Rate Audit

CPE Credits: 2

Cost: $199

Knowledge Level: Basic

Pre-requisites/required knowledge: None

Course Description: In this pre-recorded, web-based training, Dan Purvine will provide valuable insight into substantive testing procedures to be performed in an indirect cost rate audit.

Topics covered will include identification of high-risk accounts, stratification of large dollar or sensitive transactions, and appropriate testing for non-high-risk accounts.

Dan will discuss the proper use of analytical procedures, and methods that may be used for audit sampling.  He will also discuss the evaluation of testing results, and recommended audit documentation to meet the requirements of the AASHTO Audit Guide CPA Workpaper Review Program and state DOT expectations.  Proper application of these recommended testing procedures is critical to acceptance of the audit report.

A 10-question quiz will follow the training, which must be passed at a 70% rate or higher to earn the CPE credit. Once the video has been downloaded, the training will be available for five days.

Important Topics: Internal control testing, testing of labor costs, testing of compensation, testing of non-labor costs, use of analytical procedures, materiality considerations

Learning outcomes:

• Provide an overview of testing in an indirect cost rate audit;
• Describe the key internal control areas and testing performed;
• Explain the important steps in substantive testing of labor costs;
• Discuss the testing of compensation for allowability and reasonableness;
• Explain the importance of testing the allocation of costs to direct and indirect cost pools;
• Describe the AASHTO Audit Guide framework for the testing of non-labor indirect costs;
• Discuss factors influencing the determination of high-risk accounts;
• Cite examples of common high-risk accounts and typical testing procedures;
• Discuss the evaluation of testing results, including materiality considerations and application of the CPA workpaper review program.

Intended Audience: A/E firm accounting staff, state and local government agency auditors, and CPA firm staff

Instructor: Dan Purvine

Most recent revision or review date: February 2025

Course expiration date: 30 days from the date of purchase

Delivery method: Online self-study

Refund/cancellation policy: Online courses cannot be refunded, however in the case of errors in the purchase / registration process, such as a course purchased in error, incorrect participant name used, etc., we will gladly work with the purchaser to resolve the error. Please contact dan@aeclarity.com with any payment issues or questions.

Complaint resolution policy: For any issues related to this training, please contact dan@aeclarity.com