Governmental Ch. 13
Home > Preview
The flashcards below were created by user
on FreezingBlue Flashcards.
What are the auditing standards of for private public companies and what are they
for the not-for-profit entities as well as the governmental? Who issues them?
- For Profit - GAAS - AICPA
- (American Institute of Certified Public Accountants)
- Not-for-Profit - GAGAS - GAO
- (Government Accountability Office)
Standards issued for the not-for-profit and governmental entities are known as what?
- Yellow Book or GAGAS
- (Generally Accepted Government Auditing Standards)
Standards issued for the not-for-profit and governmental entities require audits of
When the organization expends more than $500,000 in fed resources in any year.
Standards issued for the not-for-profit and governmental entities “incorporate” and “provide” what?
Incorporate AICPA auditing standards
Provide extensions that are necessary due to the unique nature of public entities.
What are the differences between governmental/ not-for profit audits and public
- With Governmental/ Not-for-Profit audits…
- a. Auditors must possess knowledge of government accounting and auditing
b. Public availability of audit reports ***You can pull up a list of all***
c. Written evaluations of internal controls
d. Distribution of audit reports and availability of working papers to federal authorities
e. Governmental auditing standard (GAGAS) place much more emphasis on compliance with laws and regulations than GAAS.
What are the rules for continuing education for auditors of governmental/ not-for-profit audits?
Specifically require governmental auditors to obtain at least 80 hours of CPE every 2 years, of which 20 hours must be completed in each of the 2 years, and at least 24 hours must be related directly to governmental auditing or the unique environment in which the audited entity operates
What are the types of governmental/ not-for-profit audit engagements?
a. Performance Audit
b. Attestation Engagement
c. Nonaudit Services
- d. Financial Audit
- PANF (like PanFry)
What do Financial Audits provide?
They provide an opinion about whether an entity's financial statements are presented fairly in all material respects and comply with GAAP
What do Attestation Engagements provide?
They provide a repot and assertion about subject matter that is the responsibility of another party.
Attestation engagements may include reporting on what?
- 1. MD&A
- 2. Internal controls
- 3. Compliance with laws and regulations
- 4. Prospective financial information
- 5. Costs under contracts
- MIC PC
Performance Audits provide what?
They provide findings or conclusions based on an evaluation of sufficient, appropriate evidence against criteria.
What are the two types of performance audits? What do they "involve" or "assess"?
- 1. Economy and efficiency audits
- a. These involve aspects of appropriate acquisition, use, and safeguarding of resources
- 2. Program audits
- b. These assess the degree to which mission objectives have been achieved while adhering to applicable laws and regulations.
A-133 Audits are what type of audit?
They are Performance - Program Audits
What do Nonaudit Services help with?
- 1. Providing or explaining information
- 2. Providing advice or assistance to management
What are the two types of AICPA Audit and Accounting Guides referenced in class?
- 1. Audits of States and Local Governments
- 2. Not-for-Profit Organizations
In financial audits auditors must first determine a level of materiality for each what?
What are the 5 opinion units?
- a. Governmental activities
- b. Business-type activities
- c. Each major fund
- d. Aggregate component units
- e. The aggregate of all remaining fund info.
One effect of reporting on opinion units is that ...
Give an example
- 1. Some opinion units may receive unqualified opinions, while others receive modified opinions.
- 2. For example, failure to report infrastructure assets could result in an adverse opinion regarding the gov. activities (gov. wide statements) and an unqualified opinion for other opinion units.
Financial statement audits involve...
- 1. Examination of transactions on a test basis
- 2. Forming judgments about internal controls and compliance with laws and regulations
- 3. Rendering an opinion about whether the financial statements are prepared fairly in accordance with GAAP
- Ex OJ
What are the 5 audit reports that the auditor may be required to prepare
- 1. A report containing an opinion on the fin. statements.
- 2. A report discussing the evaluation and testing of internal control and compliance with laws and regulations
- 3. A report discussing significant deficiencies in internal controls (if any)
- 4. A report describing instances of fraud, illegal acts, or other material noncompliance (if any)
- 5. A report containing the views of responsible officials of the audited organization regarding any reported significant deficiencies. Management
- Opinion MIND
Identify and describe the 4 types of audit opinions
1. Unqualified - Financial statements appear to be in conformity with GAAP -- no qualifying ("except for") language
2. Qualified - Largely in conformity with GAAP, except for some specified item(s)
3. Adverse - Not in accordance with GAAP
4. Disclaimer - Not able to express an opinion, usually because the auditor was precluded from doing some necessary procedure.
When you think about the Single Audit Act what two things go along with it?
- 1. Federal Grant Money
- 2. A-133 Audit
What is the purpose of the Single Audit Act?
To impose one set of stringent audit guidelines to all state and local governments and not-for-profit entities, so that only one audit would have to be conducted to satisfy grantor agencies
As a result of the Single Audit Act, what other things happen?
- 1. Replace a multitude of grant-by-grant audits with a single, comprehensive, entity-wide audit.
- 2. Improve efficiency and effectiveness
- 3. Provide all federal awarding agencies a single report of a recipient of federal awards to satisfy a program's audit requirements
The Single Audit Act is administered by the _________ and is documented by the _______ within the OMB ____________ Compliance Supplement.
- 1. U.S. federal government
- 2. Office of Management and Budget
- 3. Circular A-133
What type of audit should be done if a government or not-for-profit org. expends federal resources > $500,000 in any given year?
A compliance audit known as A-133/ Single Audit
The Single Audit is an annual audit encompassing the entity's ____ and _____
- 1. Financial Statements
- 2. SEFA (Schedule of Expenditures of Federal Awards
The single audit must be conducted by a/an _____
Auditors doing a Single Audit must follow what?
GAGAS or Yellow Book Standards
What 5 things must an auditor of a Single Audit do?
- 1. Identify major programs
- 2. Group programs using a risk-based approach
- 3. Obtain an understanding of internal controls pertaining to the compliance requirements for each major program
- 4. Assess control risk
- 5. Perform tests of control
- I GO AP
What are the 2 types of groups auditors group programs into? Describe. Which receives closer auditing?
- Type A - larger programs
- Type B - smaller programs and low risk large programs
- Type A
For each major program, the auditor must test whether the program was:
- 1. Administered in conformity with appropriate OMB Circular standards
- 2. In compliance with detailed requirements in the A-133 Compliance Supplement and other specified requirements.
What would you like to do?
Home > Flashcards > Print Preview