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The Gold Standard of Government Audits
Everything you need is included to make your government audits easier—audit programs, checklists, confirmations, and auditor’s reports, including Single Audit guidance. In this Guide, you will find answers to the difficult questions other publications fail to answer about small cities, towns, villages, counties, school districts, and other special districts. The Guide contains multiple sets of audit programs, including a set of programs for accounts common to many small local governments based on a specified set of underlying risk assumptions for each audit area.
TOC for ALG
INTRODUCTORY MATERIAL
PREFACE
PEER REVIEW OF THIS GUIDE
HOW TO USE THE GUIDE
ACKNOWLEDGMENTS
ACKNOWLEDGMENT OF COPYRIGHTS
ACKNOWLEDGMENT OF TRADEMARKS
ABOUT THE AUTHORS . . .
LIST OF SUBSTANTIVE CHANGES AND ADDITIONS
IMPORTANT INFORMATION ABOUT YOUR PPC's GUIDE TO AUDITS OF LOCAL GOVERNMENTS
CHAPTER 1: INTRODUCTION AND OVERVIEW
100 INTRODUCTION
Governmental Units Covered and Not Covered by This Guide
What Is a Governmental Unit?
Definition.
Types of Governmental Units.
Common Examples.
Checklist for Determining Whether an Entity Is Governmental.
Differences between Governmental Units and Business Enterprises
101 AUTHORITATIVE LITERATURE
Accounting Literature
Auditing Literature
Professional Requirements
Professional Requirements of Government Auditing Standards.
Generally Accepted Auditing Standards.
Specific Auditing Literature.
Clarity Project of the AICPA Auditing Standards Board.
Government Audit Risk Alert
Economic and Industry Developments.
Legislative and Regulatory Developments.
Audit and Attestation Issues and Developments.
Accounting Developments and Other Matters.
Audit Risk Alert for Single Audits
Regulatory, Legislative, and Other Developments.
Audit and Attestation Issues and Developments.
Independence and Ethics Guidance.
102 GOVERNMENTAL ACCOUNTING STANDARDS
The Governmental Accounting Standards Board
Statements of the Governmental Accounting Standards Board (GASBS).
Authority of GASB Pronouncements.
GAAP Considerations for Proprietary Funds.
Grandfathering of Governmental Entities Applying Not-for-profit Principles.
Objectives of Governmental Accounting and Financial Reporting
Budgetary Accounting
The Fund Structure
Governmental Category Funds
Modified Accrual Basis of Accounting for Governmental Funds.
Revenues.
Expenditures.
Capital Assets.
Long-term Debt.
Proprietary Category Funds
Fiduciary Category Funds
Scope of Government-wide Reporting
The Financial Reporting Entity
Definition.
Financial Reporting.
Notes to the Financial Statements.
Other Reporting Relationships.
Practice Aid.
GASB Concepts Statements.
Concepts Statement on Service Efforts and Accomplishments.
Concepts Statement on Communication Methods.
Concepts Statement on Elements of Financial Statements.
103 GOVERNMENTAL FINANCIAL STATEMENTS
Minimum Reporting Requirements
Management's Discussion and Analysis
Scope.
RSI.
Required Components.
Relationship of MD&A to Transmittal Letter.
Government-wide Financial Statements
Fund Financial Statements
Notes to the Financial Statements
Required Supplementary Information (RSI)
Separate Financial Statements of a Primary Government
Separate Financial Statements of a Component Unit
Financial Statements of an Individual Fund, Agency, or Department
Comprehensive Annual Financial Report
Financial Statements on Other Comprehensive Bases of Accounting
Presentation and Disclosure Requirements.
The Auditor's Consideration of Opinion Units for OCBOA Financial Statements.
104 AUDITING REQUIREMENTS FOR GOVERNMENTS
Types of Audits
GAAS Audit.
Financial Audit.
Program Compliance Audit.
Single Audit.
Generally Accepted Auditing Standards
AICPA Fieldwork Standards.
GAAS Requirements Related to Compliance with Laws and Regulations.
AICPA Risk Assessment Standards.
Government Auditing Standards
General Standards.
When Do Government Auditing Standards Apply?
Government Auditing Standards, July 2007 Revision.
The Yellow Book's Ethical Principles.
Yellow Book Independence Requirements.
Yellow Book Competence and Continuing Education Requirements.
Yellow Book Communication Requirements.
Yellow Book Professional Judgment Requirements.
Yellow Book Reporting Requirements.
Yellow Book Quality Control and Assurance Requirements.
Single Audit Standards
Summary of Additional Compliance Testing and Internal Control Responsibilities Audit Standards.
Audit Deficiencies Related to Compliance with Government Audit Requirements
Audit Deficiencies Related to Single Audits
105 OVERVIEW OF THE AICPA RISK ASSESSMENT STANDARDS
Objective and Planning
Planning Is the Key.
Integration of SAS No. 99.
Key Provisions
Terminology
Audit Strategy.
Audit Plan.
Relevant Assertions.
Significant Risks.
Risk Assessment Procedures.
Risk of Material Misstatement.
Further Audit Procedures.
Other Terms.
106 THE PPC AUDIT PROCESS
Practice Aids
Checkpoint Tools.
107 ORGANIZATION OF THIS GUIDE
CHAPTER 2: PRE-ENGAGEMENT ACTIVITIES
200 INTRODUCTION AND AUTHORITATIVE LITERATURE
Authoritative Literature
201 CLIENT ACCEPTANCE AND CONTINUANCE
Risk-based Perspective
Specialized Considerations for Governmental Units
Prospective Client's Reputation
Sources of Information.
Communication with a Predecessor.
Assessment of Required Services
Type of Audit.
Determining the Financial Reporting Entity.
Types of Financial Statements.
Required Supplementary Information.
Independence Requirements--GAAS
Nonattest Services.
Should Proposing Journal Entries and Preparing Financial Statements in Connection with an Audit be Viewed as Bookkeeping and, Therefore, Nonattest Services?
Staff Members on Loan.
Unpaid Fees.
Client Employee.
AICPA Rulings Relevant to Governmental Audits.
Independence of Principal and Other Auditors of Governmental Financial Statements.
Proposed GASB Statement Addressing Related Parties
1005 GOING CONCERN CONSIDERATIONS
Audit Procedures
Conditions and Events
Consideration of Management Plans
Procedures When There Is Substantial Doubt
Documentation Requirements
Proposed GASB Statement Addressing Going Concern
1006 RISKS AND UNCERTAINTIES
Scope and Applicability
1007 ACCOUNTING ESTIMATES
1008 MANAGEMENT REPRESENTATION LETTER
Periods Covered by the Letter
Written Representations to Be Obtained
Reliance on Management Representations
Materiality
Federal Award Programs.
Audit Adjustments
Addressee, Date, and Signees
Alternative Wording for a Small Governmental Unit
Scope Limitations
Updates of Representation Letters
1009 CONSIDERING THE ACCUMULATED RESULTS OF AUDIT PROCEDURES
Reevaluating Risk Assessments
Evaluating the Existence of Fraud
Fraud Risk Assessment Is a Cumulative Process.
Required Procedures.
Evaluating Significant Unusual Transactions
Considering the Application of Significant Accounting Principles for Bias
Documentation Requirements
1010 ANALYTICAL PROCEDURES AND REVIEW OF WORKPAPERS
Analytical Procedures
Review of Workpapers
Detailed Review of Audit Work.
Supervisory Review.
Review Checklists.
Sole Practitioners.
Engagement Quality Control Review.
Relationship of Workpaper Review to Dating of the Auditor's Report.
1011 SUMMARIZATION AND EVALUATION
Categories for Evaluation
Audit Differences
Known and Likely Misstatements.
Communication of Misstatements to Management.
Evaluating Audit Differences
Offsetting Misstatements.
Trivial Misstatements.
Evaluating Estimates.
Different Levels for Different Amounts, Subtotals, or Totals.
Qualitative Considerations.
Overall Evaluation.
Evaluating the Existence of Fraud
Evaluating Noncompliance and Abuse--Government Auditing Standards Requirements
Documentation Requirements
Summary of Audit Differences
Treatment of Prior-year Waived Adjustments.
Across-fund Testing.
Evaluation of Overall Materiality
Consultation on Technical Issues
1012 DRAFTING FINANCIAL STATEMENTS
Government Auditing Standards Requirements
Consideration of Major Funds
Notes to the Financial Statements
Required Supplementary Information
Auditors' Procedures for RSI.
Comprehensive Annual Financial Report and GFOA Certificate of Achievement
GASBS No. 44.
Sources of Financial Reporting Illustrations
1013 REPORT ISSUANCE AND CLIENT COMMUNICATIONS
Communicating Internal Control Related Matters
General Requirements.
Identifying Control Deficiencies.
Evaluating Control Deficiencies.
Mitigating Effects of Compensating Controls.
Prudent Official Test.
Communication Requirements.
Contents of Communication.
Reporting When There Are No Significant Deficiencies.
Reporting When There Are No Material Weaknesses.
Illustrative Communications.
Reports Required by Government Auditing Standards.
Management's Response.
Management Letter Comments.
SAS No. 112 Communication of Internal Control Related Matters
Definitions.
Factors to Consider When Evaluating Control Deficiencies
Indicators of Significant Deficiencies.
Indicators of Material Weaknesses.
SAS No. 115 Communication of Internal Control Related Matters
Definitions.
Factors Affecting Magnitude of a Potential Misstatement.
Factors Affecting Whether There Is a Reasonable Possibility of a Misstatement.
Indicators of Material Weaknesses.
PPC's Process for Evaluating the Severity of Deficiencies.
Qualitative Considerations.
Communicating Deficiencies That Have Been Remediated.
Internal Control Related Practice Issues
Practice Issue #1--Can the Auditor Draft the Financial Statements?
Practice Issue #2--What if the Auditor Identifies a Material Misstatement?
Communication with Those Charged with Governance
Matters to Be Communicated.
The Auditor's Responsibilities under GAAS.
Planned Scope and Timing of the Audit.
Significant Findings from the Audit.
Timing of the Communication.
Forms of Communication.
Evaluating Adequacy of the Communication.
Documentation of Communications.
Fraud and Illegal Acts
Communications about Possible Fraud and Illegal Acts
Government Auditing Standards Requirements for Communicating Fraud, Illegal Acts, Noncompliance, and Abuse
Reporting Directly to Outside Parties.
Management Letters
1014 SUBSEQUENT DISCOVERY OF FACTS EXISTING AT DATE OF REPORT
Government Auditing Standards Requirements
Consideration of Omitted Procedures
Documentation Requirements
CHAPTER 11: AUDITOR'S REPORTS
1100 INTRODUCTION AND AUTHORITATIVE LITERATURE
Authoritative Literature
General.
Specific to Governmental Units.
References to Country of Origin
Dating of Auditors' Reports
Communicating Audit Findings in a GAAS Audit
SAS No. 112.
SAS No. 114.
SAS No. 115.
1101 STANDARD REPORT ON FINANCIAL STATEMENTS
Financial Reporting Model
Report on Basic Financial Statements and Additional Information
Reporting Model Reporting Issues
Materiality.
OCBOA or Partial Implementation of GASBS No. 34.
Report Modifications.
Terminology.
Budgetary Reporting.
Accounting Changes.
Retroactively Reporting Infrastructure Assets.
Reports on Individual Funds, Agencies, Programs, or Departments.
Unqualified Opinions on Basic Financial Statements and on Additional Detail Presented in the Basic Financial Statements
Unqualified Opinions on Basic Financial Statements and on Combining and Individual Fund Financial Statements Presented as Supplementary Information
Report on Financial Statements of the Primary Government
Component Units Are Omitted--Separate Reporting Entity Financial Statements Have Been Issued.
Component Units Are Omitted--Separate Reporting Entity Financial Statements Are Not Issued.
Report on Financial Statements of a Component Unit
Report on Financial Statements of an Individual Fund
Report on General Fund's Statements.
Report on Enterprise Fund's Statements.
Report on Financial Statements of a Department or Agency
Report on Summary Financial Information
1102 REPORTING RESPONSIBILITY FOR PRIOR PERIOD INFORMATION
1103 REPORTING GAAP DEPARTURES
Qualified Opinion on Major Governmental Funds Due to GAAP Departure
Adverse Opinion on Governmental Activities Due to Omission of General Infrastructure Assets
Adverse Opinion on Opinion Unit because of Omission of Major Fund
Adverse Opinion on Financial Statements Taken as a Whole
1104 OTHER REPORT MODIFICATIONS
Scope Limitations
Qualified Opinion because of a Scope Limitation.
Disclaimer of Opinion because of a Scope Limitation.
Scope Limitation on Financial Statements Containing Unaudited Organization, Function, or Activity.
Qualified Opinion on Basic Financial Statements because of One Unaudited Component Unit.
Part of Audit Performed by Other Auditor
Unqualified Opinions on Basic Financial Statements with RSI and SI and Reference to Another Auditor.
Uncertainty about Governmental Unit's Ability to Continue as a Going Concern
Going Concern Implications within One Year.
Going Concern Implications after One Year.
Uncertainty about Possible Effect of Violations of Grant Requirements, Laws, and Regulations
Explanatory Paragraph Required for a Change in Accounting Principle
1105 REPORTS ON OTHER COMPREHENSIVE BASES OF ACCOUNTING
Report on Regulatory Basis Financial Statements Used Solely for Regulatory Filing
Report on Regulatory Basis Financial Statements That Are Not Limited to Use in Regulatory Filings
Report on Modified Cash Basis Financial Statements
1106 REPORTING ON ADDITIONAL INFORMATION ACCOMPANYING THE BASIC FINANCIAL STATEMENTS IN AUDITOR-SUBMITTED DOCUMENTS
Reporting on Additional Information When the Report on the Basic Financial Statements Is Modified
Report on Additional Information When Opinion on Basic Statements Is Qualified.
Report on Additional Information When Opinion on Basic Statements Is Adverse or Disclaimed.
Misstated Additional Information
1107 AUDITOR'S RESPONSIBILITY WHEN AUDITED FINANCIAL STATEMENTS ARE INCLUDED IN CLIENT-PREPARED DOCUMENTS
Other Information in Electronic Sites Containing Audited Financial Statements
1108 STANDARD REPORT ON FINANCIAL STATEMENTS ISSUED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS OR IN A SINGLE AUDIT
References to Government Auditing Standards
Noncompliance Findings
Communicating Significant Matters
Confidential or Sensitive Information
Single Audit Report Considerations
Single Audit Report Checklist.
Report Example.
Part of Reporting Entity Does Not Have a Yellow Book Audit
1109 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS REQUIRED BY GOVERNMENT AUDITING STANDARDS
Reporting on Internal Control
GAO Interim Guidance on Reporting on Internal Control Over Financial Reporting Under SAS No. 115.
Reporting on Compliance with Laws and Regulations
Reporting Views of Responsible Officials
Reporting on Other Matters
Management Letters
Other Auditors
Part of Reporting Entity Does Not Have a Yellow Book Audit
Report Examples
Report with No Reportable Instances of Noncompliance or Other Matters and No Material Weaknesses or Significant Deficiencies.
Report with Reportable Instances of Noncompliance and Other Matters and Significant Deficiencies but No Material Weaknesses.
Reports Incorporating SAS No. 115 Definitions.
1110 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
SAS No. 112 Considerations
Reporting on Compliance with Major Program Requirements
Reporting on Internal Control over Major Program Compliance
Report Examples
Report with Unqualified Opinion on Compliance and No Material Weaknesses or Significant Deficiencies.
Report with Qualified Opinion on Compliance and Significant Deficiencies and Material Weaknesses.
1111 REPORTING ON SUPPLEMENTARY INFORMATION REQUIRED BY GAAP
Requirements to Present Supplementary Information
GASBS No. 10.
GASBS No. 25.
GASBS No. 27.
GASBS No. 34.
GASBS No. 43.
GASBS No. 45.
GASBS No. 50.
Procedures to Apply to Supplementary Information
Reporting on Supplementary Information in a Client-prepared Document
Reporting on Supplementary Information in an Auditor-submitted Document
Supplementary Information Derived from Audited Financial Statements.
1112 JOINTLY SIGNED REPORTS
1113 AUDITOR'S ASSOCIATION WITH MUNICIPAL DEBT ISSUANCES
Background
SEC Involvement.
Association with the Official Statement
Activities Creating an Association.
Responsibilities of Association.
Reference to the Independent Auditor.
Disclosure When There Is No Auditor Association.
Appropriate Reports To Present When There Is Auditor Association
Issuing Reports or Letters in Connection with the Official Statement
Consent Letters.
Comfort Letters.
Agreed-upon Procedures Reports.
APPENDIX 11A: Standard Reports on Financial Statements
APPENDIX 11A-1: Report on Basic Financial Statements Accompanied by Required Supplementary Information and Supplementary Information
APPENDIX 11A-2: Component Units Are Omitted--Separate Entity Financial Statements Have Been Issued
APPENDIX 11A-3: Component Units Are Omitted--Separate Entity Financial Statements Are Not Issued
APPENDIX 11A-4: Report on General Fund's Statements
APPENDIX 11A-5: Report on Enterprise Fund's Statements
APPENDIX 11A-6: Report on Financial Statements of a Department or Agency
APPENDIX 11A-7: Report on Summary Financial Information
APPENDIX 11A-8: Report on Summary Financial Information--Inconsistent with Specified Criteria
APPENDIX 11B: Reporting GAAP Departures
APPENDIX 11B-1: Qualified Opinion on Major Governmental Funds Due to GAAP Departure
APPENDIX 11B-2: Adverse Opinion on Governmental Activities Due to Omission of General Infrastructure Assets
APPENDIX 11B-3: Adverse Opinion on Opinion Unit Because of Omission of Major Fund
APPENDIX 11B-4: Adverse Opinion on Financial Statements Taken as a Whole
APPENDIX 11C: Other Report Modifications
APPENDIX 11C-1: Scope Limitation--Qualified Opinion on Basic Financial Statements because of One Unaudited Component Unit
APPENDIX 11C-2: Part of Audit Performed by Other Auditor--Unqualified Opinion on Basic Financial Statements with RSI and SI and Reference to Another Auditor
APPENDIX 11D: Reports on Other Comprehensive Bases of Accounting
APPENDIX 11D-1: Report on Regulatory Basis Financial Statements Used Solely for Regulatory Filing
APPENDIX 11D-2: Report on Regulatory Basis Financial Statements That Are Not Limited to Use in Regulatory Filing
APPENDIX 11D-3: Report on Modified Cash Basis Financial Statements
APPENDIX 11E: Standard Report on Financial Statements Issued in Accordance with Government Auditing Standards or in a Single Audit
APPENDIX 11F: Reports on Internal Control over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards
APPENDIX 11F-1: Government Auditing Standards Report with No Reportable Instances of Noncompliance or Other Matters and No Material Weaknesses or Significant Deficiencies
APPENDIX 11F-2: Government Auditing Standards Report with Reportable Instances of Noncompliance and Other Matters and Significant Deficiencies but No Material Weaknesses
APPENDIX 11G: Reports on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance Required by OMB Circular A-133
APPENDIX 11G-1: Single Audit Report with Unqualified Opinion on Compliance and No Material Weaknesses or Significant Deficiencies
APPENDIX 11G-2: Single Audit Report with Qualified Opinion on Compliance and Significant Deficiencies and Material Weaknesses
APPENDIX 11H: Municipal Debt Issuances Practice Aids
APPENDIX 11H-1: Work Program for Auditor's Association with Municipal Debt Issuances
APPENDIX 11H-2: Engagement Letter--Applying Agreed-upon Procedures for Municipal Debt Issuances
APPENDIX 11H-3: Representation Letter--Applying Agreed-upon Procedures for Municipal Debt Issuances
APPENDIX 11H-4: Report on Applying Agreed-upon Procedures for Municipal Debt Issuances
APPENDIX 11H-5: Underwriter Representation for a Comfort Letter
APPENDIX 11H-6: Comfort Letter for Municipal Debt Issuance
CHAPTER 12: SPECIAL CONSIDERATIONS IN A SCHOOL DISTRICT AUDIT
1200 BACKGROUND INFORMATION
Types of School Districts
Independent Districts.
Dependent Districts.
Common Aspects.
Charter Schools
Special Budgeting Considerations
Specialized Terminology and Organizational Features
1201 COMMON FUNDS AND ACTIVITIES
Student Activity Fund
Food Service Fund
Transportation Service Fund
Community Service Fund
Scholarship Funds
1202 PLANNING CONSIDERATIONS
Knowledge of the Client and Its Audit Requirements
Starting the Audit
Overall Timing
Audit Strategy and Internal Control
Fund-raising Foundations
Parent Teacher Organizations.
1203 COMPLIANCE AUDITING REQUIREMENTS
Examples of Financial Assistance Programs
Common State Compliance Requirements
Need for Observation during the Period
1204 FINANCIAL REPORTING ISSUES
Expenditures in Advance of the Budget Period
Joint Ventures
Financial Statements
Financial Reporting Model
1205 AUDIT REPORTING ISSUES
Combining Financial Statements
Going Concern Problems
CHAPTER 13: SPECIAL CONSIDERATIONS IN A SINGLE AUDIT
1300 INTRODUCTION AND AUTHORITATIVE LITERATURE
Authoritative Literature
Government Pronouncements.
AICPA Professional Resources.
Current AICPA and GAO Developments.
Current OMB Developments.
Current Audit Quality Developments.
PPC's Government Documents Library
Website.
Government Documents.
How to Obtain Government Documents
Electronically Accessible Audit Information
1301 APPLICABILITY OF THE SINGLE AUDIT
Federal Awards and the Expenditure Threshold
Nonfederal Entities.
Federal Awards.
Federal Financial Assistance.
Audit Threshold.
Determining the Amount of Federal Awards Expended
Basis for Determining Federal Awards Expended.
Determining the Amount of Noncash Assistance Expended.
Audit Frequency and Periods Covered
Frequency of the Audit.
Period to Be Included.
1302 THE COGNIZANT OR OVERSIGHT AGENCY FOR AUDIT
Cognizant Agency for Audit
Responsibilities of the Cognizant Agency for Audit.
Oversight Agency for Audit
Responsibilities of the Oversight Agency for Audit.
1303 OBJECTIVES AND SCOPE OF THE SINGLE AUDIT
Objectives
Primary Objectives.
Specific Objectives.
Scope
Major Federal Award Programs
Program Identification.
Cluster of Programs.
Single Audit Risk-based Approach.
Type A Three-year Requirement.
Option 1 and the Type B Program Cap.
Option 2.
Selecting Type B Programs.
Percentage of Coverage Rule and Low-risk Auditee Exception.
Special Grantor Requests.
First Year Audit Exemption.
Low-risk Auditees.
Worksheets for Determining Major Programs.
Reporting Requirements in a Single Audit
Government Auditing Standards.
Reporting Requirements--Grantor Agency Variations
Reporting on Compliance with Laws and Regulations.
Reporting on Internal Control.
1304 AUDIT OF FINANCIAL STATEMENTS IN A SINGLE AUDIT
Effect of a Single Audit on Audit of Financial Statements
Schedule of Expenditures of Federal Awards
Schedule Requirements.
Schedule May Not Agree with Other Federal Award Reports.
Major Program Designation.
Optional But Recommended Information.
Accumulating Information for the Schedule.
The Auditor's Responsibility for Reporting on the Schedule of Expenditures of Federal Awards.
Additional Auditor Requirements Related to Compliance Audit Objectives and Understanding Internal Controls Over the Schedule of Expenditures of Federal Awards.
Common Deficiencies in the Schedule of Expenditures of Federal Awards.
Auditor's Report on Financial Statements
Reference to Government Auditing Standards.
References to Separately Issued Internal Control and Compliance Report.
Report Illustrations.
1305 CONSIDERATION OF INTERNAL CONTROL IN A SINGLE AUDIT
Obtaining an Understanding of Internal Control
Controls at Multiple Locations.
Compliance Supplement Guidance.
Assessing Control Risk
Determining Controls to Test
Multiple Internal Control Processes.
Ineffective Internal Control.
Using Results of Prior Years' Tests of Controls.
Using Single Audit Testwork to Reduce Testwork in the Financial Statement Audit.
Performing Tests of the Operating Effectiveness of Controls
Sampling and Multipurpose Tests in Tests of Controls.
Evaluating the Results of Tests of Controls
Control Deficiencies.
Reporting Responsibilities
Report Illustrations.
1306 CONSIDERING COMPLIANCE WITH LAWS AND REGULATIONS IN A SINGLE AUDIT
The Auditor's Responsibility for Laws and Regulations in All Audits
Additional Responsibilities for Laws and Regulations in a Single Audit
Audit Risk Considerations.
Materiality Considerations.
Performing a Compliance Audit
Identifying Direct and Material Compliance Requirements
Identification of Significant Laws and Regulations Applicable to Federal Awards.
OMB Circular A-133 Compliance Supplement.
Types of Compliance Requirements.
Determining Which Requirements to Test.
Suggested Audit Procedures.
Possible Changes/Additions to Compliance Requirements.
Federal Programs Not Included in the Compliance Supplement.
Planning the Audit of Compliance
Performing Tests of Compliance
Sampling Considerations.
Obtaining Sufficient Appropriate Audit Evidence.
Testing Transactions for Compliance with Requirements Applicable to Major Federal Programs.
Suggested Audit Procedures.
Consideration of Abuse in a Single Audit
Consideration of Subsequent Events in a Single Audit
Evaluating Results of Testing
Questioned Costs.
Effect of Questioned Costs on the Major Program Compliance Opinion.
Projecting Questioned Costs.
Effect of Questioned Costs on the Financial Statements.
Reporting on Compliance
Schedule of Findings and Questioned Costs
Findings Required to Be Reported.
Preparing the Schedule of Findings and Questioned Costs
Illustrated Schedules of Findings and Questioned Costs
1307 AUDIT PROGRAMS
1308 SUBMISSION OF REPORTS FOR A SINGLE AUDIT
Reporting Package
Financial Statements and Schedules
Summary Schedule of Prior Audit Findings
Auditor Responsibility to Follow Up on Previously Reported Findings.
Corrective Action Plan
Information to Be Included in the Corrective Action Plan.
Data Collection Form
Due Date.
Notification of Extension.
Responsibility for Submitting Reports
Additional Submission by Subrecipients.
Clearinghouse Responsibilities.
1309 OTHER MATTERS
Responsibility for Subrecipients
Consideration of Subrecipient Monitoring.
OMB Circular A-133 Audit Threshold.
Allowable Audit Costs.
Management Representations
Audit Workpapers
Restriction on Auditors Preparing Indirect Cost Proposals
Audit Quality Concerns in Single Audit Engagements
Report on National Single Audit Sampling Project.
AUDIT FIRM POLICIES (ALG-FP)
ALG-FP-1: Audit Team Members
AUDIT CHECKLISTS AND PRACTICE AIDS (ALG-CX)
ALG-CX-0.1: Application of Practice Aids to Engagements
ALG-CX-1: Planning and Preliminary Engagement Activities
ALG-CX-1.1: Engagement Acceptance Form
ALG-CX-1.1.1: Engagement Acceptance Form--Component Unit
ALG-CX-1.1.2: Evaluating Potential Component Units' Inclusion in Reporting Entity
ALG-CX-1.2: Engagement Continuance Form
ALG-CX-1.3: ET Interpretations 101-3 and 101-10 Documentation Form
ALG-CX-1.4: Effect of Nonaudit Services on Independence--Government Auditing Standards
ALG-CX-1.5: Effect of Personal and External Impairments on Independence--Government Auditing Standards
ALG-CX-1.6: Continuing Professional Education Documentation Form
ALG-CX-1.7: Single Audit and Major Program Determination Worksheet
ALG-CX-1.8: Low-risk Federal Program Determination Worksheet
ALG-CX-1.9: High-risk Federal Program Determination Worksheet
ALG-CX-1.10: Determining Whether an Entity Is a Government Entity
ALG-CX-2: Financial Statement Materiality
ALG-CX-2.1: Materiality Worksheet for Planning Purposes
ALG-CX-2.2: Planning Materiality--Federal Award Programs
ALG-CX-3: Understanding the Entity
ALG-CX-3.1: Understanding the Entity and Identifying Risks
ALG-CX-3.2: Engagement Team Discussion
ALG-CX-3.3: Fraud Risk Inquiries Form
ALG-CX-3.4: Audit Inquiries Summary Form
ALG-CX-4: Understanding Internal Control
ALG-CX-4.1: Understanding the Design and Implementation of Internal Control
ALG-CX-4.2: Financial Reporting System Documentation Form
ALG-CX-4.2.1: Financial Reporting System Documentation Form--Significant Transaction Classes
ALG-CX-4.2.2: Financial Reporting System Documentation Form--IT Environment and General Computer Controls
ALG-CX-4.3: Walkthrough Documentation Table
ALG-CX-4.4: Internal Control System--Federal Award Programs
ALG-CX-5: Activity and Entity-level Control Forms
ALG-CX-5.1: Entity-level Control Form for Control Environment
ALG-CX-5.2: Entity-level Control Form for Risk Assessment
ALG-CX-5.3: Entity-level Control Form for Information and Communication
ALG-CX-5.4: Entity-level Control Form for Monitoring
ALG-CX-5.5: Control Activities Form for General Computer Controls
ALG-CX-5.6: Control Activities Form for Financial Close and Reporting
ALG-CX-5.7: Control Activities Form for Cash
ALG-CX-5.8: Control Activities Form for Investments
ALG-CX-5.9: Control Activities Form for Revenue and Receivables--Governmental Funds
ALG-CX-5.10: Control Activities Form for Revenue and Receivables--Proprietary Fund Types
ALG-CX-5.11: Control Activities Form for Expenditures for Goods and Services and Accounts Payable and Other Liabilities
ALG-CX-5.12: Control Activities Form for Payroll and Related Liabilities
ALG-CX-5.13: Control Activities Form for Inventories
ALG-CX-5.14: Control Activities Form for Capital Assets and Expenditures
ALG-CX-5.15: Control Activities Form for Debt and Debt Service Expenditures
ALG-CX-5.16: Control Activities Form for Equity and Financial Statement Reconciliations
ALG-CX-5.17: Control Activities Form for Self-insurance
ALG-CX-5.18: Control Activities Form for Grant and Similar Programs
ALG-CX-5.19: Control Activities Form for Municipal Solid Waste Landfills
ALG-CX-5.20: Common Control Objectives by Audit Area and Transaction Class
ALG-CX-6: Identifying Risk
ALG-CX-6.1: Entity Risk Factors
ALG-CX-6.2: Fraud Risk Factors
ALG-CX-7: Risk Assessment
ALG-CX-7.1: Risk Assessment Summary Form
ALG-CX-7.2: Inherent Risk Assessment Form
ALG-CX-7.3: Risk of Material Noncompliance Assessment Worksheet--Federal Award Programs
ALG-CX-8: Planning Substantive Procedures
ALG-CX-8.1: Planning Worksheet to Determine Extent of Substantive Procedures
ALG-CX-8.2: Sampling Planning and Evaluation Form--Substantive Procedures
ALG-CX-8.3: Sampling Worksheet for Testing Account Coding and Classifications
ALG-CL-7.3: Confirmation of Grant Entitlement and Drawdowns
ALG-CL-7.4: Confirmation of Grant or Contract Payments and Receivables
ALG-CL-7.5: Confirmation of Note Receivable
ALG-CL-7.6: Confirmation of Property Taxes Receivable
ALG-CL-7.7: Positive Confirmation of Property Tax Revenue
ALG-CL-7.8: Negative Confirmation of Property Tax Revenue
ALG-CL-7.9: Confirmation of Assessed Valuation of Property Tax Roll
ALG-CL-7.10: Confirmation of Current or Delinquent Tax Roll Maintained by Another Agency
ALG-CL-7.11: Confirmation of Franchise Tax Revenue
ALG-CL-7.12: Confirmation of Sales Tax Revenue
ALG-CL-8: Investments and Securities Confirmations and Letters
ALG-CL-8.1: Receipt for Securities Counted by Auditor
ALG-CL-8.2: Confirmation of Securities Held by Brokers
ALG-CL-8.3: Confirmation of Securities Held by a Third Party
ALG-CL-8.4: Confirmation of Repurchase, Reverse Repurchase, or Securities Lending Agreements
ALG-CL-8.5: Confirmation of Deposit Collateral
ALG-CL-9: Not Used
ALG-CL-10: Payables and Debt Confirmations and Letters
ALG-CL-10.1: Accounts Payable Confirmation
ALG-CL-10.2: Note Payable Confirmation
ALG-CL-10.3: Confirmation of Debt for Which No Written Loan Agreement Exists
ALG-CL-10.4: Confirmation of Bonds Outstanding
ALG-CL-10.5: Confirmation of Compensating Balances
ALG-CL-10.6: Confirmation of Line of Credit
ALG-CL-10.7: Confirmation of Contingent Liabilities with Financial Institutions
ALG-CL-11: Benefit Plan Confirmations and Letters
ALG-CL-11.1: Request For Information--Single-employer and Agent Multiple-employer Defined Benefit Pension Plans
ALG-CL-11.2: Request for Information--Cost-sharing Multiple-employer Defined Benefit Pension Plans
ALG-CL-11.3: Request For Information--Single-employer and Agent Multiple-employer Other Postemployment Benefits Plans
ALG-CL-11.4: Request for Information--Cost-sharing Multiple-employer Defined Benefit Other Postemployment Benefits Plans
ALG-CL-12: Other Confirmations and Letters
ALG-CL-12.1: Confirmation of Utility Purchases
ALG-CL-12.2: Confirmation of Insurance Coverage
ALG-CL-12.3: Confirmation of Lease Agreement
ALG-CL-12.4: Related Party Questionnaire
ALG-CL-12.5: Single Audit Letter to Regulator
ALG-CL-12.6: Letter to Client about Regulator Access to Audit Documentation
ALG-CL-12.7: Request for Service Auditor's Report
ALG-CL-12.8: External Peer Review Report Transmittal Letter
ALG-CL-12.9: Data Request Letter
ALG-CL-13: Predecessor/Successor Communications
ALG-CL-13.1: Request for Predecessor Auditor to Release Information to Successor Auditor
ALG-CL-13.2: Letter Granting Successor Auditors Access to Workpapers
ALG-CL-13.3: Client Consent and Acknowledgment Letter
ALG-CL-13.4: Communication with Predecessor Auditor Prior to Final Engagement Acceptance
ALG-CL-13.5: Communication with Predecessor Auditor Prior to Engagement Proposal
ALG-CL-14: Principal and Other Auditor Communications
ALG-CL-14.1: Request for Representations from Other Auditor
ALG-CL-14.2: Inquiry of Principal Auditor by Other Auditor
ALG-CL-14.3: Principal Auditor's Response to Inquiries from Other Auditor
ALG-CL-14.4: Letter from Principal Auditor to Other Auditors Regarding Related Parties
AUDIT PROGRAMS--CORE
ALG-AP-1: Audit Program for General Planning Procedures
Other General Planning Procedures
ALG-AP-2: Audit Program for General Auditing and Completion Procedures
Other General Auditing and Completion Procedures
ALG-AP-3: Audit Program for Federal Award Programs--General Procedures
ALG-AP-4: Audit Program for Minutes, Contracts, Ordinances, and Laws
ALG-AP-5: Audit Program for Cash
ALG-AP-6: Audit Program for Investments
Other Audit Procedures for Investments
ALG-AP-7: Audit Program for Revenue, Receivables, and Receipts--Governmental Funds
Other Audit Procedures for Revenue, Receivables, and Receipts--Governmental Funds
ALG-AP-8: Audit Program for Service Revenue and Receivables--Proprietary Funds
Other Audit Procedures for Service Revenue and Receivables--Proprietary Funds
ALG-AP-9: Audit Program for Expenditures/Expenses for Goods and Services and Accounts Payable and Other Liabilities
Other Audit Procedures for Expenditures/Expenses for Goods and Services and Accounts Payable and Other Liabilities
ALG-AP-10: Audit Program for Payroll and Related Liabilities
Other Audit Procedures for Payroll and Related Liabilities
ALG-AP-11: Audit Program for Inventories
ALG-AP-12: Audit Program for Capital Assets and Expenditures
Other Audit Procedures for Capital Assets and Expenditures
ALG-AP-13: Audit Program for Debt and Debt Service Expenditures
Other Audit Procedures for Debt and Debt Service Expenditures
ALG-AP-14: Audit Program for Equity and Financial Statement Reconciliations
ALG-AP-15: Audit Program for Insurance and Self-insurance
Other Audit Procedures for Insurance and Self-insurance
ALG-AP-16: Audit Program for Grant and Similar Programs
Other Audit Procedures for Grant and Similar Programs
ALG-AP-17: Audit Program for Federal Award Programs Not Included in the Compliance Supplement
ALG-AP-18: Audit Program for Municipal Solid Waste Landfills
AUDIT PROGRAMS--SPECIFIED RISK (ALG-AP-S)
ALG-AP-1-S: Audit Program for General Planning Procedures--Specified Risk
ALG-AP-2-S: Audit Program for General Auditing and Completion Procedures--Specified Risk
ALG-AP-3-S: Not Used
ALG-AP-4-S: Audit Program for Minutes, Contracts, Ordinances, and Laws--Specified Risk
ALG-AP-5-S: Audit Program for Cash--Specified Risk
ALG-AP-6-S: Audit Program for Investments--Specified Risk
ALG-AP-7-S: Audit Program for Revenue, Receivables, and Receipts--Governmental Funds--Specified Risk
ALG-AP-8-S: Audit Program for Service Revenue and Receivables--Proprietary Funds--Specified Risk
ALG-AP-9-S: Audit Program for Expenditures/Expenses for Goods and Services and Accounts Payable and Other Liabilities--Specified Risk
ALG-AP-10-S: Audit Program for Payroll and Related Liabilities--Specified Risk
ALG-AP-11-S: Audit Program for Inventories--Specified Risk
ALG-AP-12-S: Audit Program for Capital Assets and Expenditures--Specified Risk
ALG-AP-13-S: Audit Program for Debt and Debt Service Expenditures--Specified Risk
ALG-AP-14-S: Audit Program for Equity and Financial Statement Reconciliations--Specified Risk
ALG-AP-15-S: Audit Program for Insurance and Self-insurance--Specified Risk
ALG-AP-16-S: Audit Program for Grant and Similar Programs--Specified Risk
Continuing Professional Education
CPE & Training Solutions
INDEX
CPE related to these PPC Guides is now available!
New this year, visit Course Finder at trainingcpe.thomson.com to download course materials related to these PPC Guides in PDF format at no cost. For many of these courses, you can also opt to use our new Online Grading Center to submit your completed exams. Click on each title below to view available self-study courses related to these PPC Guides. Also new this year—course materials related to these PPC guides are now available in the CPE tab on Checkpoint!
Now it's easier than ever to meet your CPE requirements with the PPC guidance you use and trust!
The CPE & Training Solutions Online Grading Center gives you easy access to many print-based self-study courses and allows you to complete your CPE exams online for immediate results. Plus, the My Courses feature provides convenient retention and retrieval of your CPE course certificates and completions. Features include:
Immediate 24/7 Grading: Grading is now available 24-hours per day, seven days per week. Submit your final exam for grading at any time, and you’ll get immediate results and certification.
No Express Grading Fee: There’s no additional charge for completing the exam online. You will only be charged the normal course grading fee.
Convenient Retention and Retrieval of CPE Course Completions: CPE Certifications are available for every print course exam you successfully complete in the Online Grading Center.
PPC offers print-based self-study in these topics:
You may access PPC Guide-related course materials at no charge by visiting Course Finder at trainingcpe.thomson.com and searching for PPC Self-Study Print-based courses. Many courses are available for PDF download directly from the Course Finder!
INTRODUCTORY MATERIAL
PREFACE
