Flashcards in Government Auditing Deck (44)
What are the sources of Government Auditing Standards?
GAAS and GAGAS
What does GAGAS includes designing of?
The audit to provide reasonable assurance of detecting material misstatements resulting from noncompliance
What are the audit requirements for federal financial assistance?
Expanded internal control documentation and testing requirements, expanded reporting to include formal written reports on the consideration of internal control and the assessment of control risk, expanded reporting to include whether the federal financial assistance has been administered in accordance with applicable laws and regulations, and application of single audit standards to federal financial assistance
What are the 2 types of government audits?
Financial and performance
Subjects of attestation agreements could include when dealing with Government Auditing Standards?
Compliance with specified laws, regulations, rules, contracts, or grants and effectiveness of internal control over compliance with specified requirements
What are the 3 objectives of performance audits under GAGAS?
Effectiveness, economy, and efficiency, internal control, and compliance
What are some keys to effectiveness, economy, and efficiency?
Organizational goals and cost benefit or cost effectiveness
What are some keys to internal control?
Objectives are achieved efficiently and compliance with laws
What are some keys for compliance?
Target population has been served
What are some increased management responsibilities identified by GAGAS?
Identification of applicable laws, establishment of internal controls, preparation of supplementary financial reports, and obtaining an audit
What are some increased auditor responsibilities identified by GAGAS?
Obtaining reasonable assurance that the financial statements are free of material misstatements resulting from violations of laws and regulations that have a direct and material effect on the determination of financial statement amounts and assessing whether management has identified laws and regulations that have a direct and material effect on the determination of amounts in the entity's financial statements
What is an objective of compliance audits?
Obtain sufficient evidence to form an opinion on whether the entity compiled, in all material respects, with the compliance requirements applicable to its programs
GAAS requirements presume that management will in regards to Compliance audits?
Identify government programs and understand and comply with compliance requirements, maintain effective controls, conduct ongoing evaluation and monitoring, and take appropriate corrective action
Risk of material noncompliance is composed of two elements?
Inherent risk of noncompliance and control risk of noncompliance
What is the susceptibility of a compliance requirement to noncompliance that could be material?
Inherent risk of noncompliance
What is the risk that noncompliance with a compliance requirement that could be material will not be prevented or detected?
Control risk of noncompliance
What is the risk that the auditor will not detect material noncompliance that exists?
Detection risk of noncompliance
How can an auditor change the detection risk of noncompliance?
Varing the nature, extent, and timing of audit procedures
Tests of the operating effectiveness of controls may be required if any one of the following conditions exist?
The risk assessment includes an expectation of the operating effectiveness of controls over compliance, substantive procedures do not provide enough evidence to support a conclusion, and test of controls are required by the applicable governmental audit requirements
What are some required documentation when dealing with noncompliance?
The assessed risk of material noncompliance, responses to the risk assessment, the basis or rationale for materiality levels, and compliance with supplemental requirements
What are the 2 concepts of independence in GAGAS?
Mind and appearance
How often must an organization performing audits with GAGAS have an external peer review?
At least once every 3 years
What are the elements of a finding?
Criteria, condition, cause, and effect or potential effect
What is expectation of a program or operation?
What is the situation or status that exists?
What is the reason for the condition or the deviation from the criteria?
What is a clear logical link between the condition and the deviation from the criteria?
Effect or potential effect
What are additional GAGAS requirements for reporting on financial audits?
Statement in the auditor's report that they complied with GAGAS, Report on internal control and compliance with provisions of laws, regulations, contracts and grant agreements
Is a Schedule of Findings included in the report?