Checklist for Review of Financial Audits Performed by the OIG_part2 doc

©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 11 Governmental Financial Auditing The Yellow Book standards are often called generally accepted government auditing standards (GAGAS). This is trial version www.adultpdf.com ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 12 Financial Audit and Reporting Requirements – Yellow Book  Compliance auditing  Materiality and significance  Reporting This is trial version www.adultpdf.com ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 13 Audit and Reporting – Single Audit Act and OMB Circular A-133 The threshold for requiring a single audit is $500,000. The office of Management and Budget issued a revised Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, to provide administrative guidance for implementing the single audit requirements. This is trial version www.adultpdf.com ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 14 Audit Requirements The audit should be in accordance with generally accepted government auditing standards (GAGAS). The auditor must obtain an understanding of internal control over federal programs sufficient to support a low assessed level of control risk for major programs. This is trial version www.adultpdf.com ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 15 Audit Requirements The auditor should determine whether the client had complied with the laws, regulations, and the provisions of contracts or grant agreements that may have a direct and material effect on each of its major programs. This is trial version www.adultpdf.com ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 16 Reporting Requirements  An opinion as to whether the schedule of federal awards is presented fairly in all material respects in relation to the financial statements as a whole  An opinion on whether the financial statements are in accordance with GAAP This is trial version www.adultpdf.com ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 17 Reporting Requirements  A report on internal control related to the financial statements and major programs  A report on compliance with laws, regulations, and the provisions of contracts or grant agreements  A schedule of findings and questioned costs This is trial version www.adultpdf.com ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 18 Operational Auditing  The purpose of operational auditing is to determine the effectiveness or efficiency of any part of an organization This is trial version www.adultpdf.com ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 19 Learning Objective 3 Distinguish operational auditing from financial auditing. This is trial version www.adultpdf.com ©2008 Prentice Hall Business Publishing, Auditing 12/e, Arens/Beasley/Elder 26 - 20 Differences Between Operational and Financial Auditing  Distribution of the reports  Inclusion of nonfinancial areas  Purpose of the audit This is trial version www.adultpdf.com . Circular A-133 The threshold for requiring a single audit is $500,000. The office of Management and Budget issued a revised Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations,. opinion as to whether the schedule of federal awards is presented fairly in all material respects in relation to the financial statements as a whole  An opinion on whether the financial statements. Arens/Beasley/Elder 26 - 15 Audit Requirements The auditor should determine whether the client had complied with the laws, regulations, and the provisions of contracts or grant agreements that may