Why Audits Are Important
by Bryan Ruprecht, Staff Associate II
Posted on March 26, 2025
Oh no, did the IRS or a governing body send you a letter saying you need an audit and now you don’t know what to do? An audit is stereotypically required because an entity did something wrong and the IRS wants them to be audited; however, that is not always the case. Arizona Revised Statutes 15-914 and 15-183(E)(6), requires that school districts and charter schools have annual financial audits. The prime purpose of the audit is to form an opinion on the information in the financial audit report as a whole, and not to identify all possible irregularities. The audits must be performed by an independent certified public accountant. Annual financial audits are a key component for Arizona school districts because they ensure accurate reporting, cost-effective operations, and compliance with regulations. Members of a Board of Education (board) for a school district, are ultimately responsible for ensuring the school budget is well managed and operations are cost-effective. Audits provide your board the best opportunity for improving fiscal management and protecting your taxpayer dollars through independent review.
Audits can identify best practices and make recommendations to improve school operations. Audits can also help detect and prevent financial irregularities, fraud, or mismanagement, and audits help maintain the trust of stakeholders. This means that although auditors are on the lookout for signs of potential material fraud, it is not possible to be certain that all fraud will be identified. Other purposes of audits include ensuring that financial information is reported accurately and fairly, financial statements are prepared in accordance with the Government Accounting Standards Board (GASB), the processes or quality controls comply with requirements, improve decision-making, and comply with laws and regulations.
Audits can be exhausting for both parties, the school district and the auditor. Audit fatigue can set in for both the client and the auditor, which is described as the feeling of exhaustion, frustration, or weariness, often leading to decreased focus, reduced productivity, and general mental strain due to the repetitive nature of the process. Trust is more important now than ever before. And never before has it been more difficult to determine whom and what you can trust. The value of independent confirmation is therefore greater than ever. An auditor’s signature means you can trust the information your decision-making is based on. When we perform an audit, our main goal is to increase the trust in the information reported. In addition, we offer useful suggestions in connection with routines, risk management, governance, and control, because we often assess the quality of internal controls while we work. This means we are both auditors and advisors.
