Governmental Auditing Standards

Question 1

Description

Answer 1

Government Auditing Standards (also known as Generally Accepted Government Auditing Standards or GAGAS) are issued by the U.S. Government Accountability Office (in GAO’s “Yellow Book”) under the authority of the Comptroller General of the United States.

Question 2

Additional reporting requirements in addition to the 10 Criteria for GAAS

Answer 2

1. Additional reporting requirements regarding internal control – Government Auditing Standards require a written report on internal control in every financial audit under GAGAS. This includes commentary about the auditor’s understanding of internal control for planning purposes and the assessment of control risk, as well as the scope of the auditor’s testing of internal control. When the auditor communicates “significant deficiencies,” the auditor should also obtain a response from officials of the entity and include a copy of management’s written response (or a summary of management’s oral response) in the auditor’s report.
2. Additional reporting requirements regarding compliance with applicable laws and regulations – Government Auditing Standards require a written report on compliance with applicable laws and regulations. This report should distinguish between (a) “general requirements” that apply to all federal financial programs; and (b) “specific requirements” that apply to a particular program by a specific statutory (legislative) requirement.
   * **The auditor’s report on compliance should also include (1) any known instances of fraud that are viewed as more than inconsequential; (2) any known instances of illegal acts that are viewed as more than inconsequential; (3) other identified violations of contracts or grants that are material; and (4) any known instances of “abuse” that are material.
3. Additional reporting requirements regarding illegal acts – Government Auditing Standards also require the auditor to report any known instances of illegal acts that could result in criminal prosecution.