Governmental Auditing Topics

Governmental Accounting Topics

Oklahoma Municipal State Laws

Governmental Auditing Update

 PCIE Releases Report on Single Audit Quality

In July 2007, the President’s Council on Integrity and Efficiency (PCIE) released its report on the National Single Audit Sampling Project which reports the findings of quality control reviews performed by Federal Offices of Inspectors General (OIGs) on the sample of single audit reports submitted between April 1, 2003 and March 31, 2004. The PCIE report identified a number of significant deficiencies in the single audits reviewed. Of the 208 audit engagements reviewed, the report classifies 63 or 35% of the engagements as “Unacceptable”, and another 30 or 16% as having only “Limited Reliability”. A number of recommendations were made by the OIGs in the report in an effort to improve single audit quality.

A copy of the report can be obtained from the PCIE web site http://www.ignet.gov/randp/rpts1.html.

 The GAO Issues 2007 Revisions to Government Auditing Standards

In January 2007, the GAO issued the 2007 revision to Government Auditing Standards (GAO-07-162G). The revisions supersede the 2003 revision, are wide-ranging, and will affect your Government Auditing Standards (GAGAS) financial statement audits and attestation engagements for periods beginning on or after January 1, 2008, and for performance audits beginning on or after January 1, 2008. Early implementation is encouraged. The January 2007 version contains the final 2007 revisions, except for the quality control and peer review sections in chapter 3. GAO is exposing for comment redrafted sections of chapter 3 in response (GAO-07-431G) to the wide range of comments it received on that chapter. The printed version of the complete 2007 revision will be made available after the quality control and peer review sections are finalized (currently anticipated for late spring of 2007). Among the significant revisions are:

As noted above, the 2007 revision is effective for financial statement audits and attestation engagements for periods beginning on or after January 1, 2008, and for performance audits beginning on or after January 1, 2008. Certain standards issued by the AICPA incorporated by reference into the 2007 revision have earlier effective dates. The GAO has indicated that for financial statement audits conducted under Government Auditing Standards, the effective dates of those AICPA standards will apply.

The GAO has indicted that until the 2007 revisions become effective, auditors should adopt the terminology and definition contained in SAS 112 when reporting on internal control deficiencies and include in their reports material weaknesses and significant deficiencies.

AICPA Launches Governmental Audit Quality Center

Over the past year, the AICPA has introduced a new service that is committed to helping its members achieve the highest standards in performing quality audits. The concept of Audit Quality Centers was introduced in 2003 and establish a series of firm-based voluntary membership units designed to help CPAs meet the challenges of performing quality audits in unique and complex areas. The three new Audit Quality Centers to-date, which were approved by the AICPA Governing Council in fall 2003, focus on audits performed in three areas of critical importance to the public interest, public company audits, employee benefit plan audits and governmental audits. The most recent of the Centers to be unveiled is the Governmental Audit Quality Center. The Governmental Audit Quality Center’s primary purpose is to promote the importance of quality governmental audits and the value of such audits to purchasers of governmental audit services. According to the AICPA, each year more than 6,300 CPA firms perform what is estimated to be over 100,000 governmental audits.

The specific Membership requirements for the Governmental Audit Quality Center include:

• Designating an audit partner who has firm-wide responsibility for the quality of the firm’s governmental audit practice
• Establishing firm-wide quality control programs specific to the firm’s governmental audit practice
• Establishing policies and procedures to comply with applicable professional standards and Center membership requirements
• Performing annual internal inspections that include a review of the firm’s governmental audit practice
• Ensuring public availability of information about the firm’s most recent peer review
• Maintaining AICPA membership in good standing by all audit partners in the United States
• Paying annual dues.

The Governmental Audit Quality Center website is www.aicpa.org/gaqc, and is now available to those wishing to learn more about the Center or to become a member.

Governmental Auditing Topics

Governmental Accounting Topics

Oklahoma Municipal State Laws