Utah State Auditor's Office

Hollie Andrus and Deborah Davis from the Utah State Auditor’s Office came and showed us how state
auditors work. The Utah state auditor’s office is the official office that audits the state of Utah. The
Utah state auditor’s office is like the Deloitte and KPMG employees for the state. They go and audit
entities that are owned by the state, which are required by the state constitution to be audited by the
state auditor’s office. They audit state universities, public safety offices, state courts, health services,
the tax commission, etc.

They are considered independent from the state because the Utah State Auditor is an elected position.
If you were able to vote in Utah last November then you had the opportunity to vote for who should be
in this position. The Utah State Auditor does not need to be a CPA to be elected into the position. The
new State Auditor has an engineering degree, and is bringing a new perspective to the auditing office.

Deborah explained to us that the Utah State Auditor’s Office still follows the same audit standards as
other auditors, which requires them to follow SAS 99. This stand-alone risk assessment standard, one
part of which compels the auditor to ask three questions, was the FASB’s response to the need of a
revision to the clarity standard, the FASB latter came out with more statements about clarity. The three
questions of SAS 99 are “Are you aware of fraud? Have suspicions of fraud? Or have heard allegations of
fraud?” These questions can lead to extremely interesting stories.

Deborah and Hollie told us about how when people answer yes to these questions the first thought that
runs through their head is “oh great I am going to blow my budget.” Deborah told us of a University
Professor that got federal grant money to teach a certain program at the university. He did not
accurately keep track of his time on the federal program and charged different expenses and even
family trips to Alaska to the account. They found out about the fraud from other professors that noticed
that the thief seemed to have more money than his salary could provide. It took a lot of time, but they
eventually unraveled the complex net.

From this experience, they told us that it is ok to go over budget when you have found something that
could lead to the discovery of a material misstatement or fraud.