3. Standards vs. Procedures  Auditing standards differ from auditing procedures. Procedures are acts that the auditor performs during the course of an audit in order to comply with the standards.

4. G A A S Generally Accepted Auditing Standards

5. OVERVIEW  Issued by the American Institute of Certified Public Accountants – AICPA  Defined in the Statements on Auditing Standards - SAS

6.  General Standards  Field Work Standards  Reporting Standards

7. SAS 95 & 98  General Standards Adequate proficiency and training as an auditor Adequate proficiency and training as an auditor The audit is to be performed by a person having adequate technical training and proficiency as an auditor.The audit is to be performed by a person having adequate technical training and proficiency as an auditor. Independence Independence An independent mental attitude is to be maintained by the auditorAn independent mental attitude is to be maintained by the auditor

8.  Due Professional Care Due professional care is exercised in the performance of the audit and preparation of the report. Due professional care is exercised in the performance of the audit and preparation of the report.

9. Standards of Field Work  Planning and Supervision The work should be planned and any assisting auditors should be supervised. The work should be planned and any assisting auditors should be supervised. Understanding the basic characteristics of the client Understanding the basic characteristics of the client

10. Internal controls Internal controls Internal controls should be evaluated as a basis for relying on the records for testing/sampling.Internal controls should be evaluated as a basis for relying on the records for testing/sampling.

11.  Sufficient evidential matter Records, observations, inquiries and if necessary 3 rd party records should be used in determining reliable audit results. Records, observations, inquiries and if necessary 3 rd party records should be used in determining reliable audit results.

12.  Standards of Reporting Basically apply to financial auditing, not tax/fee compliance Basically apply to financial auditing, not tax/fee compliance

14. How do the standards relate to IFTA and IRP auditing? Both the Agreement and the Plan address these standards in their respective Audit Procedures Manuals. Both the Agreement and the Plan address these standards in their respective Audit Procedures Manuals.

15. General Standards  Adequate training and proficiency

16. IFTA Audit Procedures Manual A200 General Standards A200 General Standards.100 Training and Proficiency.100 Training and Proficiency Auditors should have adequate technical training and proficiency as outlined in Section A400. Auditors should have adequate technical training and proficiency as outlined in Section A400. Section A400 – Personnel Qualifications and Responsibilities Section A400 – Personnel Qualifications and Responsibilities A410 AdministrationA410 Administration A420 Audit StaffA420 Audit Staff

17. IRP Audit Procedures Manual (proposed) Article 2 - General Accounting and Auditing Standards Article 2 - General Accounting and Auditing Standards 201. Training and Proficiency201. Training and Proficiency The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor.The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor.

18. Independence  An independent mental attitude is to be maintained by the auditor.

20. IFTA – Audit Procedures Manual A200.200 Auditor Independence A200.200 Auditor Independence Auditors should maintain independent mental attitudes in relating to audit assignments. The auditor must be without bias with respect to the licensee under audit to ensure impartiality. This independence is an obligation to fairness.Auditors should maintain independent mental attitudes in relating to audit assignments. The auditor must be without bias with respect to the licensee under audit to ensure impartiality. This independence is an obligation to fairness.

21. IRP – Audit Procedures Manual (proposed)  Article 2, 205. Auditor Independence Free from personal and external impairments to independence Free from personal and external impairments to independence Independent mental attitude Independent mental attitude Without bias with respect to Registrant Without bias with respect to Registrant Maintain impartiality Maintain impartiality

22. Due Professional Care

23. IFTA Audit Procedures Manual  A200 – General Standards .300 Professional Care Professional care should be exercised during the audit field work and in preparing the Interjurisdictional Audit Report Professional care should be exercised during the audit field work and in preparing the Interjurisdictional Audit Report

24. IRP Audit Procedures Manual (proposed)  Article 2 – General Accounting and Auditing Standards  202.Professional Care Conducted in a professional manner Conducted in a professional manner Results clearly documented Results clearly documented Uniform program Uniform program

25. Standards of Field Work

27. Planning and Supervision

28. IFTA Audit Procedures Manual  A220 Examination Standards.100 Preaudit analysis.100 Preaudit analysis Preaudit analysis shall be conducted and documented.Preaudit analysis shall be conducted and documented. Reported information Reported information Trends Trends  A410.200 ….There must be supervisory follow-up and review of the auditor’s procedures ….There must be supervisory follow-up and review of the auditor’s procedures

29. IRP Audit Procedures Manual (proposed) Article 2, 204 – Adequate Planning and Supervision  Field work adequately planned and supervised  Standardized audit program (checklist)  Report and work papers reviewed and approved by Audit Supervisor

30. Internal Controls Trip Sheets Summaries Returns/Registration

31. IFTA Audit Procedures Manual  A220.200 Examination Standards Study and Evaluation Study and Evaluation Internal accounting should be evaluated in order to determine if the licensee’s records can be depended on in order to perform a sample.Internal accounting should be evaluated in order to determine if the licensee’s records can be depended on in order to perform a sample.  A640 Evaluation of Internal control.100 Review and documentation.100 Review and documentation Information-gathering phaseInformation-gathering phase InquiryInquiry observationobservation

32. Changes in the accounting systemChanges in the accounting system Records retainedRecords retained Supporting documentationSupporting documentation Identify weaknesses in the systemIdentify weaknesses in the system

33. IRP Audit Procedures Manual (proposed)  203. Study and Evaluation Registrant’s reporting system Registrant’s reporting system StudyStudy EvaluateEvaluate Sampling test work and projections Sampling test work and projections Reliability of internal accounting controlsReliability of internal accounting controls Impact of any weaknesses in the controlsImpact of any weaknesses in the controls

34.  Article 7 702. Evaluation of Internal control 702. Evaluation of Internal control Review and documentationReview and documentation Tests of complianceTests of compliance Report on weaknessesReport on weaknesses

36. Sufficient Evidential Matter

37. SAS 103  Requires audit documentation in sufficient detail to: Provide an experienced auditor with no previous connection to the audit a clear understanding of the work performed. Provide an experienced auditor with no previous connection to the audit a clear understanding of the work performed. NatureNature TimingTiming ExtentExtent Results of audit procedures performedResults of audit procedures performed

38. The audit evidence obtained, its source and the conclusions reached. The audit evidence obtained, its source and the conclusions reached. Requires the auditor to document audit evidence that is identified as being contradictory or inconsistent with the final conclusions Requires the auditor to document audit evidence that is identified as being contradictory or inconsistent with the final conclusions How the auditor addressed the contradiction or inconsistencyHow the auditor addressed the contradiction or inconsistency

39. IFTA Audit Procedures Manual  A520 Standard Approach Evaluate licensee’s distance accounting Evaluate licensee’s distance accounting Verify fleet miles/kilometers to source documents Verify fleet miles/kilometers to source documents Determine if distance accounting properly accumulates all operation distances Determine if distance accounting properly accumulates all operation distances Verify jurisdiction allocations Verify jurisdiction allocations

40.  A670 Audit Documentation Communicate audit results Communicate audit results Document & justify procedures Document & justify procedures Indicate source of audit results Indicate source of audit results Communicate suggestions & recommendations Communicate suggestions & recommendations Clearly support audit findings Clearly support audit findings

41.  A680 Audit File Contents.100 Schedules.100 Schedules Summary scheduleSummary schedule Supplementary schedulesSupplementary schedules.200 Support Documentation.200 Support Documentation Detail informationDetail information Actual records reviewed which support audit results Actual records reviewed which support audit results

42. Detail of retail or bulk purchasesDetail of retail or bulk purchases Detail of bulk fuel withdrawalsDetail of bulk fuel withdrawals Analysis of trips auditedAnalysis of trips audited Listing of Records Maintained Listing of Records Maintained Indicate what records are maintainedIndicate what records are maintained If in compliance with the Agreement & the PlanIf in compliance with the Agreement & the Plan

44. IRP Audit Procedures Manual (proposed)  Article 2, 206. Working Paper Documentation Working papers should be sufficiently detailed so that a reviewer (internal or external) can understand them without extensive oral explanations…. Working papers should be sufficiently detailed so that a reviewer (internal or external) can understand them without extensive oral explanations….

45.  Working papers should: Provide the principal support for the Audit reportProvide the principal support for the Audit report Aid in the performance of and review of auditsAid in the performance of and review of audits Facilitate third party reviewsFacilitate third party reviews Document whether audit objectives were achievedDocument whether audit objectives were achieved Document all planning, audit procedures performed and conclusions reachedDocument all planning, audit procedures performed and conclusions reached

46.  401.Adequacy of records Consistently product required information to substantiate application Consistently product required information to substantiate application Sufficient detail that vehicle movement may be traced Sufficient detail that vehicle movement may be traced Operational records that support Operational records that support Total In-Jurisdiction DistanceTotal In-Jurisdiction Distance Total DistanceTotal Distance  406. Accountable Distance Traveled Registrant must record all movement Registrant must record all movement InterjurisdictionalInterjurisdictional IntrajurisdictionalIntrajurisdictional EmptyEmpty DeadheadDeadhead BobtailBobtail

48. Standards of Reporting

49. IFTA Audit Procedures Manual  A660 Audit Reports.100 Licensee Audit Report.100 Licensee Audit Report Name and Address of licenseeName and Address of licensee Account NumberAccount Number Audit PeriodAudit Period Types of records auditedTypes of records audited Description of audit techniquesDescription of audit techniques Net distance adjustmentsNet distance adjustments Net tax paid fuel purchases adjustmentsNet tax paid fuel purchases adjustments

50. MPG/KPL as reportedMPG/KPL as reported Net fuel tax adjustment per jurisdictionNet fuel tax adjustment per jurisdiction Remarks and recommendationsRemarks and recommendations Signature of auditor or reviewing official and dateSignature of auditor or reviewing official and date Interjurisdictional Audit Report Interjurisdictional Audit Report Name of base jurisdictionName of base jurisdiction Name and address of licenseeName and address of licensee FEI or equivalentFEI or equivalent Reported tax by jurisdictionReported tax by jurisdiction Audited tax by jurisdictionAudited tax by jurisdiction

51. PenaltyPenalty Interest by jurisdictionInterest by jurisdiction Total by jurisdictionTotal by jurisdiction

53. IRP Audit Procedures Manual (proposed)  Article 8 802. Registrant Audit Report 802. Registrant Audit Report Name and address of RegistrantName and address of Registrant Account number and Fleet numberAccount number and Fleet number Registration Year(s) auditedRegistration Year(s) audited Distance traveled and percent as originally filedDistance traveled and percent as originally filed Distance traveled and percent as a result of AuditDistance traveled and percent as a result of Audit Amount of percent factor changeAmount of percent factor change Net fees due each Member JurisdictionNet fees due each Member Jurisdiction

54.  Remarks, recommendations, observations, and findings  Identification of any Power Units removed from the Fleet w/full fees assessed  Date of issuance and name of the auditor(s)

55.  803. Interjurisdictional Audit Report Evidence of timely notification to other jurisdictions Evidence of timely notification to other jurisdictions Name of Base JurisdictionName of Base Jurisdiction Name and address of RegistrantName and address of Registrant Account numberAccount number Registration Year(s)Registration Year(s) Number Apportionable VehiclesNumber Apportionable Vehicles

56. Reported Jurisdiction distance Reported Jurisdiction distance In-jurisdiction distance percentagesIn-jurisdiction distance percentages Apportionable feesApportionable fees Brief narrative Brief narrative Date of issuance and name of the auditor(s) Date of issuance and name of the auditor(s) Statement on adequacy of distance accounting system Statement on adequacy of distance accounting system

57. SUMMARY  Both the Agreement’s and Plan’s Audit Procedures Manuals follow Generally Accepted Auditing Standards to the degree in which these standards are applicable their respective audit situations.

58.  It is the responsibility of each member jurisdiction to insure that all audits are conducted in accordance with these standards and are applied fairly, without bias, to each licensee and registrant.