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External auditors outline FY2025 audit scope; results expected in December
Summary
CliftonLarsonAllen (CLA) briefed Norfolk City Council on the FY2025 audit scope, entities covered, two significant audit risks (management override and revenue recognition) and a projected December timeline for issuing financial statements and findings.
CliftonLarsonAllen (CLA) told Norfolk City Council that it is conducting the FY2025 financial statement and single‑audit work for the city, the school system, the economic development authority and the retirement system, and that audit results are expected in December.
Sherry Amos, principal with CLA, reviewed the scope of services and emphasized auditor responsibilities, management responsibilities and two significant audit risks required by auditing standards: management override of controls and revenue recognition. She said auditors will also review internal controls and disclose any noteworthy deficiencies to management and council.
"We do have two significant risks for the audit," Amos said, identifying management override of controls and revenue recognition as standard areas of focus for local government audits. Amos described management's responsibility to prepare financial statements in accordance with U.S. GAAP and to maintain internal controls, while CLA's role is to obtain audit evidence and render an opinion.
Amos summarized new accounting guidance the city will implement for FY2025: GASB guidance related to compensated absences and additional disclosures on concentration risks (presented as GASB 101 and a related disclosure standard in the briefing). She said management is still evaluating the impact of the compensated‑absences guidance and that CLA will follow up in its December presentation of audit results.
CLA said audit fieldwork is underway and that any internal control deficiencies or management‑level issues would be reported as management letter comments or findings in the final report. The firm did not present audit findings at the work session; Amos said CLA plans to return in December to present final results to council under applicable standards.
The presentation was informational and generated questions about the firm’s procedures for identifying risks and the city’s preparatory work; no council action was taken.
