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Governmental Audits. AICPA early work GAO and Comptroller General Need for extended audit work Government Audit Standards Yellow Book + Revisions Single Audit Act of 1984 Circular A-128 & 133 (Rev 1997) AICPA SOPs Single Audit Act Amendment of 1996. Governmental & NPO Auditing.

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governmental audits
Governmental Audits
  • AICPA early work
  • GAO and Comptroller General
  • Need for extended audit work
    • Government Audit Standards
    • Yellow Book + Revisions
    • Single Audit Act of 1984
    • Circular A-128 & 133 (Rev 1997)
    • AICPA SOPs
    • Single Audit Act Amendment of 1996
governmental npo auditing
Governmental & NPO Auditing
  • State, Local, and Federal Government
    • General Accounting Office and Comptroller General of U. S.
    • AICPA – “Audits of State and Local Governments”
    • Legislative Bodies
  • Non-government NPOs
    • Internal Revenue Service
    • Auditing Standards Board-AICPA
    • GAO and Comptroller General of U.S. (1984)
gagas audits
GAGAS Audits

Different Types of Audits

  • Financial
    • Fair presentation in conformance with GAAP
  • Attestation Engagements
    • May be financial or non-financial
    • Assertion about a matter and reporting thereon
  • Performance Audits
    • Systematic examination that assesses performance of management and organizations toward meeting objectives; Aims are to improve programs (Effectiveness and Efficiency)
    • Service Efforts and Accomplishments Trend
governmental audits reporting standards
Governmental Audits-Reporting Standards
  • Procedure paragraph and “accepted in the United States of America.” (p. 391)
  • Opinion on Compliance and Internal Control System
  • Opinion on Federal Financial Assistance Programs
  • In Relation to Opinion on the Schedule of Federal Awards
  • Report to describe instances of fraud, etc.
single audit act amendments
Single Audit Act & Amendments
  • (1984) One single audit that assured that federal and state fund expenditures were in accordance with law and grant agreements
    • Originally applied only to S & L Governments with $25,000 or more Federal Financial Assistance
    • Circular A-133 extended to NG NFP organizations
    • Cognizant ($50 Million)and Oversight Agencies
single audit act 1996 amendment
Single Audit Act(1996 Amendment)
  • Increased Threshold Amount to $300,000 ($500,000 in 2004)
  • Included hospitals as coverage under the act
  • In 1997, AICPA issued SOP 98-3
    • Auditing of S & L Governments and Nonprofit Organizations Receiving Federal Awards
auditing ffa awards
Auditing FFA Awards
  • Major programs audited according to 50% or 25% rule risk-based approach
  • Categorize programs as
    • Type A – Larger programs
    • Type B - Smaller programs
  • Type A are major programs unless low-risk (audited within past 2 years with no major audit findings)
  • Type B are major programs only if high-risk
  • Refer to example on page 395
non government npo audits
Non-government NPO Audits
  • Not publicly held so not required to have annual audits of financial statements
  • However, most medium to large organizations will go through independent audits as a matter for their own protection
  • Must apply for tax exemption through the Internal Revenue Service with Form 1023
  • May have unrelated business income on which must pay taxes
  • Annual Form 990 filed with IRS (See pages 400-401) Includes UBIT if applicable
  • Last three year’s copies of 990 must be provided upon request by interested parties