Question $3$ Case Analysis

You are the new administrator for the Village of New York and are quite eager to start your job at the village. The previous administrator has graciously agreed to help you transition into the new position for a couple of days. As you go through the procedure manuals, records, and council minutes, you notice that the village$$s administration appears to be in great shape. On the old administrator$$s last day, there is indication that the TCA reporting is done and the prior year$$s financial statements are compliant. The previous administrator also mentions that the auditor that completed the prior year$$s audit has indicated to the village they will no longer be auditing the village and has provided no suggestions for a new auditor. As the conversation finishes, there is mention that the audit fees were four times the normal amount for the prior year audit. The previous administrator has a suggestion to alleviate the auditor problem, hire the Mayor$$s sister to audit the village. She is a qualified accountant, very knowledgeable about accounting, and knows the village council really well. After discussing the auditor situation with the previous administrator, you decide it would be best to talk to the Mayor about the situation. In preparation for your meeting with the Mayor, you decide to do a little research on the approach to be taken when replacing the village$$s auditor.

Required:

$1.$ Prepare the necessary briefing note in point form for replacing the village$$s auditor.

$2.$ Be sure to consider the following when developing the briefing note:

a$.$ The usage of the mayor$$s sister as an auditor.

b$.$ Legislative requirements and section in the Municipalities Act for municipal auditors.

c$.$ How to locate and assess a new auditor.

d$.$ Applicable standards for municipal accounting and auditing.

e$.$ The level of the audit fees going forward

f$.$ Current compliance status for the village$$s prior year financial statements and the anticipated workload going forward.