Government Auditing Flashcards
Which of the following statements is a standard applicable to financial statement audits in accordance with Government Auditing Standards?
An auditor should report on the scope of the auditor’s testing of internal controls.
Under Government Auditing Standards, reports for financial and compliance audits should include a report on the auditor’s consideration of internal controls made as part of the financial and compliance audit. Therefore, under GAS, an auditor should report on the scope of the auditor’s testing of internal controls.
The GAO standards list several threats to independence. The threat of self-review is defined as:
when an auditor will not appropriately evaluate the results of a previous judgment made or service performed by an auditor.
Tell, CPA, is auditing the financial statements of Youth Services Co. (YSC), a not-for-profit organization, in accordance with Government Auditing Standards. Tell’s report on YSC’s compliance with laws and regulations is required to contain statements of:
A: both positive and negative assurance.
Tell’s report regarding tests of compliance should contain positive and negative assurances. A positive assurance consists of a statement that the tested items were in compliance with applicable laws and regulations. A negative assurance is a statement that nothing came to the auditor’s attention as a result of specified procedures that caused the auditor to believe that the untested items were not in compliance with applicable laws and regulations.
