Government Auditing Standards

Question 1

An important difference between GAAS and GAGAS is related to internal controls. What is that difference?

Answer 1

A report must be issued on internal controls under GAGAS

Question 2

If a significant deficiency is noted in the audit, what should the auditor do?

Answer 2

Obtain a response from the entity’s management which will be included in the auditors report

Question 3

The auditors should report on compliance with laws and regulations and comment on the scope of those tests?

Answer 3

TRUE

Question 4

If there is a fraud or an illegal act, does the auditor have the responsibility to report to outside sources?

Answer 4

Yes, especially if management doesn’t respond appropriately

Question 5

What are the three C’s that auditors need to report on as apart of a GAGAS audit?

Answer 5

Controls- Must issue a report on internal controls

Compliance- Must issue a report on compliance with laws and regulations

Crimes- Must report on all known illegal acts

Question 6

What is the Single Audit Act of 1984? What is impacts on the audit?

Answer 6

Applicable to state and local governmental entities that have expenditures of federal assistance (grants) now aggregating at least $750,000 in a given year.

Imposes requirements on such entities and their auditors beyond GAAS and even GAGAS

Auditors have to identify MAJOR assistance programs to be audited

Question 7

What are the reports that need to be issued under the single audit act?

Answer 7

• Fairness of the F/S and schedule of assistance of federal assistance
• Internal controls
• Compliance with laws and regulations
• Schedule of findings (non-compliance, significant deficiencies, instances of fraud) identifies criteria used to detect, conditions involved, and potential effect