Xavier University – Ateneo de Cagayan
Office of Student Affairs
Student Activities and Leadership Development

Student Organization Financing Guidelines
2014 Edition

I. Introduction

a. Audit Environment
Student organizations, just like any other organizations have basic financial needs necessary for them to operate and perform their functions. These financial needs are being provided by the members and the school (also referred to as the stakeholders), and it is the responsibility of each organization to make good use of available financial resources.

As this financial responsibility of organizations to their stakeholders arises, they are required to establish a system of control that will ensure the integrity of all financial transactions. This financial integrity should then be completely and accurately captured in all financial records and reported periodically to the stakeholders. In essence, the system will be the organizations’ first line of defense against error, fraud, negligence, or dishonesty in arriving at the financial information. This system is aptly called the organizations’ internal control.

However, it is not enough that organizations utilize their own internal control. There is a need to examine or review critically and systematically the organizations’ reports, documents, records, financial policies, and controls for the purpose of arriving at an objective conclusion regarding their accuracy, completeness, and reliability. This is called the external audit. Both the internal control and the external audit comprise the audit environment.

There are five key players in an organization’s audit environment: the President, the Treasurer, the Finance Officer, the Internal Auditor, and the External Auditor. Each of them has certain responsibilities to ensure the credibility of the audit environment. The following enumerates