M7 Government Audits Flashcards
What are the subjects of attestation agreements
Compliance
Effectiveness of internal control
Presentation of MD&A
Reliability of performance measures
What is the purpose of a performance audit
Provide objective analysis, findings and conclusions to assist management in
Improving program performance and operations
Reducing costs
Facilitating decision making
Contributing to accountability
What is included in compliance audit workpapers
-Scope, an understanding of internal control, assessed control risk
-Risk assessment procedures
-Responses to the assessed risk
-Materiality levels
-Any material instances of fraud and illegal acts that were discovered
-Significant deficiencies in internal control
-Statement that the audit should be planned to obtain reasonable assurance about whether noncompliance could have a material efect on the programs audited.
-A disclaimer of opinion on internal control over compliance (the auditor states the audit was conducted to express an opinion on compliance but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance.
What is the appropriate response to potential fraud
-Extend audit procedures to determine whether fraud has occurred
How does GAGAS vary from AICPA standards
GAGAS does not require that the auditor express an opinion on internal controls. (only requires a report on the scope and findings)
-Reporting standards for financial audits under Government audit standards differ from GAAS in that they require the auditor to present the results of the auditor’s test of controls.
How are reporting responsibilities under GAGAS expanded
- Reports on compliance with laws, rules, and regulations which may affect the F/S
- Reports on internal control over financial reporting
What is the primary reason an CPA would withdraw from a review engagement?
The entity declines to provide the accountant with a signed representation letter.
