GAO

Question 1

The GAO’s guidelines apply to those who conduct audits of:

Answer 1

1) Government entities (e.g., federal, state and local)
2) Entities that receive government awards (e.g., colleges, trade schools, charities, local governments) in compliance with generally accepted government auditing standards (GAGAS)

Question 2

Independence of mind

Answer 2

Performing an audit without being affected by influences that compromise professional judgment enables an auditor to act with integrity, objectivity, and professional skepticism.

Question 3

Independence in appearance

Answer 3

No reasonable and informed third party should be given reason to conclude that the integrity, objectivity, and/or professional skepticism of the auditor are compromised.

Question 4

Time period—Independence must be maintained during:

Answer 4

1) Any period of time falling within the period covered by the financial statements or subject matter of the audit, and
2) The period of the professional engagement, which begins at the earlier of the signing of an initial engagement letter or some other agreement to perform an audit and ends with the formal or informal notification of the termination of the professional relationship or issuance of a report, whichever is later.

Question 5

Like the AICPA framework, the GAO’s conceptual framework involves three steps:

Answer 5

1) Identifying threats to independence
2) Evaluating the significance of the threats identified, both individually and in the aggregate
3) Applying safeguards as necessary to eliminate threats or reduce them to an acceptable level