AUD 6 Government

Question 1

Sources of government auditing standards

Answer 1

GAAS
GAGAS
OMB Circular A-133

Question 2

GAGAS - Government Auditing Standards (Yellow Book)

Answer 2

Foundations and ethical principles, general standards, standards for financial audits and attestation engagements, and field work and reporting standards for performance audits.
Designing the audit to provide reasonable assurance of detecting material misstatements resulting from noncompliance.

Question 3

Audit Requirements for Federal Financial Assistance

Answer 3

• use GAAS and GAGAS
• expanded internal control documentation and testing requirements
• expanded reporting to include formal written reports on the consideration of internal control and the assessment of control risk
• expanded reporting to include whether the federal financial assistance has been administered in accordance with applicable laws and regulations
• application of single audit standards to federal financial assistance

Question 4

Attestation Engagements

Answer 4

• compliance with specified laws, regulations, rules, contracts and grants
• effectiveness of internal control over compliance with specific requirements
• presentation of MDA
• reliability of performance measures

Question 5

Performance audits

Answer 5

• effectiveness, economy, and efficiency
• internal control
• compliance

Question 6

Effects of laws and regulations on financial statements

Answer 6

1. Increased management responsibilities identified by GAGAS:
   - identification of applicable laws and regulations with compliance requirements
   - establishment of internal controls to provide reasonable assurance that the entity complies with those laws and regulations
   - preparation of supple financial reports
   - obtaining an audit that satisfies relevant legal, regulatory or contractual requirements
2. Increased Auditor responsibilities identified by GAGAS
   - reasonable assurance free of material misstatements violation of laws
   - assessing if mgt has identified laws and regulations that have effect of FS

Question 7

GAAS requirements for Compliance audits

Answer 7

1. Objectives of compliance audits - obtain sufficient evidence to form an opinion on whether the entity complied with compliance requirements
2. Assumptions - management will identify govern programs and comply, maintain controls, ongoing evaluation and monitoring, corrective actions