AUD 5.8 - Single Audits Flashcards
Audis of receipts to of federal financial assistance should be conducted in accordance with:
GAAS and GAGAS
What additional requirements does an audit of federal financial assistance require?
Expanded internal control documentation and testing
Formal written reports on the consideration of internal control and the assessment of control risk
Whether the federal financial assistance has been administered in accordance with applicable laws and regulation (compliance requirements)
Application of single audit standards to federal financial assistance
Requires entities that expend total federal assistance equal to or in excess of $750,000 in a fiscal year to have an audit performed in accordance with this.
Single audit act
The single audit act allows for what two types of audits:
Single audit or program-specific audit
This type of audit under the single audit act is only available to certain grant recipients who expend awards under a single federal program and do not require a financial statement audit
Program specific audit
What are the two main objectives of a single audit?
- Audit of the entity’s financial statements and reporting on a separate schedule of expenditures of federal awards
- Compliance audit of federal awards expended during the year
The single audit act requires that materiality be:
Considered separately in relation to each major program rather than in relation to the financial statements as a whole
Programs classified as “major” are:
Those that expend $750,000 or more in federal financial assistance
Or
Classified as high risk
Who is subject to audit requirements associated with federal financial assistance:
Contractors
Federal award recipients
Sub-recipients
Federal award receipt ends and sub-recipients
Not contractors
In order to have a program specific audit instead of a single audit, the auditor must:
Contact the inspector general of the applicable federal agency and obtain a current program-specific audit guide
How are single audits different from program specific audits?
Single audits: include a report on the financial statements of the whole organization and audit reports on specific programs
Program specific audit: do not include reports on the financial statements of the organization as a whole
Auditors must be selected how?
Using procurement standards that preclude limitations on competition established by federal guidelines
Proposals made by auditors for selection must be evaluated for:
Responsiveness
Relevant experience
Availability
Results of peer reviews
The audit report must be submitted within the earlier of:
30 days of receipt of the auditors report
Or
9 months after the end of the audit period
Reports must be retained for:
3 year from the date of submission
The audit report must be submitted in what format? And who is responsible for report submissions?
Electronically and the auditee
In the auditors report, the auditor should express and opinion on what and report on what?
Express an opinion on the financial statements
Express and opinion on the Schedule of Expenditures of Federal Awards
Report on internal control over financial reporting AND compliance with federal statues
Report on compliance for each major program and report on internal control over compliance
The five reports issued under a single audit include:
- Financial statement report (GAAS)
- SEFA Report
- GAGAS Report (Yellow Book)
- Single audit report
- Schedule of findings and questioned costs
The determination of major programs uses what approach?
Risk based approach
Step 1 of identifying major programs includes determining Type A and Type B programs. What are these considered?
Type A : $750,000 or more
Type B : less than $750,000
Step 2 of identifying major programs includes identifying Type A programs that a are low risk. Type A programs cannot be low risk if they had:
- Material weakness in internal control
- Modified opinion on the program
Or - Known or likely questioned costs that exceed 5% of the total federal awards expended in that program
Step 3 of identifying major programs includes identifying:
Type B programs that are high risk using professional judgement
At a minimum, major programs should include:
All high risk Type A and Type B programs
For low risk auditees, the auditor must test:
For other auditees, the auditor must test:
Low risk: 20% of the total federal awards expended
Others: 40% of the total federal awards expended
