GAQC Web Event 2013 AICPA Guides and Illustrative Reports

Report
2013 AICPA Guides for Yellow Book/Circular
A-133, State and Local Governments, and Notfor-Profit Entities:
What to Expect for Clarity, Auditor Report
Changes, and More
A Governmental Audit Quality Center Web Event
March 13, 2013
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Administrative Notes
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Presenters
Erica Forhan, CPA
Susan Stewart, CPA
Partner
Moss Adams LLP
Director
McGladrey LLP
Moderating:
Joe Heffernan, CPA
Mary Foelster, CPA
Partner
Plante & Moran PLLC
Director
AICPA
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What we will cover
Background on the AICPA Guides Being
Covered Today
• Government Auditing Standards and Circular A-133
Audits – Audit Guide (GAS-A133 Guide)
• State and Local Governments – Audit and Accounting
Guide (SLG Guide)
• Not-for-Profit Entities – Audit and Accounting Guide
(NFP Guide)
Overarching Changes Affecting all Guides
What you Should Expect for Updates to
Guide Content and Illustrative Reports
Clarity and GAAS Resources to Assist You
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Background on the
AICPA Guides Being
Covered Today
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AICPA Guides Focusing on Today
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Authoritative Status of AICPA Guides
Auditing guidance considered interpretive
publication under AU-C section 200, Overall
Objectives of the Independent Auditor and the
Conduct of an Audit in Accordance with Generally
Accepted Auditing Standards
Auditor required to consider interpretive
publications in planning and performing the audit
If the auditor does not apply the auditing guidance,
the auditor should document how requirements of
GAAS were complied with
Basis of accounting content is from GAAP standardsetters, but Guides provide additional explanation
SLG Guide includes “level b” GAAP
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Status of 2013 Editions of the Guides
GAS-A133 Guide
• Guide content in final review stage (Auditing Standards Board
(ASB), GAO, OMB, federal agency representatives)
• eBook available on May 24 and print version on June 24
SLG Guide
• Guide content in final review stage (ASB, GASB)
• eBook available on May 3 and print version on June 3
NFP Entities Guide
• eBook available now; online Professional Library subscription
available late March; print version will be available April 12
2013 editions of the Guides can be ordered through
www.cpa2biz.com
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Overarching Changes
Affecting all Guides
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Overarching Changes Affecting all Guides
Terminology Changes (AU-C section 200)
• General, Field Work and Reporting Standards (10 General
Standards) have been replaced
• If an auditor fulfills the overall objective of the audit and meets
applicable ethical requirements the ASB believes that the
auditor will have fulfilled the requirements currently stated in the
10 standards
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Overarching Changes Affecting all Guides
Terms of Engagement (AU-C section 210)
• Requires the auditor to determine if preconditions for an audit
are present
• Acceptable financial reporting framework in the preparation
and presentation of the financial statements and
management acknowledgement of responsibility
• The auditor is required to obtain the agreement of management
that it:
• acknowledges and understands its responsibility for
selecting the appropriate financial reporting framework,
• establishing and maintaining internal control, and
• providing access and information to the auditor.
• Auditor generally should not accept engagement with
management-imposed scope limitation
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Overarching Changes Affecting all Guides
Considerations of Laws and Regulations
(AU-C section 250)
• requires the performance of procedures to identify instances of
noncompliance with those laws and regulations that may have a
material effect on the financial statements
Opening Balances in Initial Audits (AU-C
section 510)
• Strengthens existing standards by making clear that reviewing a
predecessor auditor’s audit documentation cannot be the only
procedure performed to obtain sufficient appropriate audit
evidence regarding opening balances.
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Overarching Changes Affecting all Guides
Group Audits (AU-C section 600)
•
•
•
•
•
•
•
Definitions
Responsibilities of the Group Engagement Partner
Making Reference
Involvement With, and Understanding of, Component Auditors
Materiality
Communication with Others and Documentation
Archived GAQC Web event, New Group Audits Standard and Its
Effect on Your Governmental and Not-For-Profit Audits
Using the Work of an Auditor’s Specialist
(AU-C 620)
• Incremental documentation requirements for in-firm specialists
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Overarching Changes Affecting all Guides
(Reporting)
Forming an Opinion and Reporting on
Financial Statements (AU-C 700)
• Description of management’s responsibility in more detail than
AU section 508
• Use of headings to clearly distinguish each section of the report
• Report on the Financial Statements
• Management's Responsibility for the F/S
• More robust wording
• Auditor’s Responsibility
• Opinion(s)
• Other Matters
• Report on Other Legal and Regulatory Requirements
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Overarching Changes Affecting all Guides
(Reporting)
Emphasis of Matter (AU-C section 706)
• Refers to a matter appropriately presented or disclosed in the
financial statements that, in the auditor’s professional judgment,
is of such importance that it is fundamental to users’
understanding of the financial statements.
Other Matter (AU-C section 706)
• Refers to a matter other than those presented or disclosed in the
financial statements that, in the auditor’s professional judgment,
is relevant to users’ understanding of the audit, the auditor’s
responsibilities, or the auditor’s report
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Overarching Changes Affecting all Guides
(Reporting)
Terminology Changes
Extant Term
Clarified Term
Standard Report
Term not used because we refer to
the opinion and not the report
Clean opinion/Qualified Opinion
Unmodified Opinion/Modified
Opinion
Explanatory Paragraph
Emphasis-of-matter paragraph or
other-matter paragraph (as
applicable)
Explanatory Language
Additional communication
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What you Should Expect
for Updates to Guide
Content and Illustrative
Reports
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GAS-A133 Guide
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Part I: Financial Statement Audits Under
Government Auditing Standards
Major changes in 2013 edition relate to 2011
edition of Government Auditing Standards
(Yellow Book or YB) and clarity auditing
standards
Relevant professional standards and
applicable Audit and Accounting Guides (SLG
and NFP Guides) are primary source of
information on GAAS financial statement
audit requirements
Describes GAAS to the extent necessary to
explain the related requirements of the YB
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Chapter 1 – Introduction and Overview of
Government Auditing Standards
2011 Yellow Book now incorporates all AICPA
auditing standards
• Previous Yellow Book did not adopt AICPA general standards
(pre-clarity)
• As per AU-C 200 this means that all auditors performing
Government Auditing Standards audits are subject to all AICPA
auditing standards
• Compliance with AICPA Code of Professional Conduct
Geography Changes
• Overview material updated and moved into chapter 1
• Applicability of the Yellow Book
• Use of terminology to define Yellow Book requirements
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Chapter 2 - The Ethical Principles and
General Standards in Government Auditing
Standards
Chapters 2 - 4 have been realigned with the revised
chapters 1 - 4 of the YB
Greatly expanded independence content
• Conceptual Framework for independence
• Independence of mind and in appearance
• Emphasis on the importance of considering individual threats to
independence both individually and in aggregate
• Focus on nonaudit services requirements
• Comparison of AICPA and YB independence requirements
added
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Chapter 2 - The Ethical Principles and
General Standards in Government Auditing
Standards
Expanded Independence Documentation
Discussion
• Auditors required to assess and document whether
management possesses suitable skills, knowledge or
experience (SKE) to oversee nonaudit services
• Documentation also required when threats are
significant and safeguards are applied
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Chapter 2 - The Ethical Principles and
General Standards in Government Auditing
Standards
Updated all YB general standard material – for
example:
• Peer Review – changes to align YB with AICPA Peer Review
Standards
• Peer review report terminology
• Continuing Professional Education
• Distinction made between internal and external specialists
• External specialists are not required to meet the YB CPE
requirements (audit team should determine that external
specialists are qualified and competent)
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Chapter 3 - Planning and Performing a
Financial Statement Audit in Accordance with
Government Auditing Standards
GAAS content modified due to restructure of the YB
• All AICPA standards adopted; YB does not repeat GAAS
emphasis areas like it used to
• Very few additional YB requirements remain
• Auditor communication
• Previous audits and attestation engagements
• Fraud, noncompliance with provisions of laws, regulations,
contracts, and grant agreements, and abuse
• Developing elements of a finding
• Audit documentation
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Chapter 3 - Planning and Performing a
Financial Statement Audit in Accordance with
Government Auditing Standards
Terms of Engagement (AU-C section 210)
• Already covered the basics earlier in the presentation – chapter
emphasizes the preconditions, etc.
• Chapter provides updated list of items to be considered for the
engagement letter that specifically relate to the YB
• Auditor responsibilities and the reports the auditor is
expected to issue and prepare
• Management’s responsibilities – See YB Appendix I, section
A1.08
• Considerations when nonaudit services performed
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Chapter 3 - Planning and Performing a
Financial Statement Audit in Accordance with
Government Auditing Standards
Consideration for Laws and Regulations in an Audit
of Financial Statements (AU-C section 250)
• Specific procedures to detect illegal acts, including inspecting
correspondence
• Emphasis that YB adds “provisions of contracts and grants”
Written Representations (AU-C section 580)
• Chapter provides updated list of items that may be relevant in
representation letter for a YB audit
• Primarily just tinkered with wording to ensure matched clarity
standards and YB
Group Audits (AU-C section 600)
• Guidance just points to the SLG and NFP guides for details of
affect of AU-C section 600 on financial statement audits and
Chapter 4 for reporting illustrations
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Chapter 4 - Auditor Reporting Requirements
and Other Communication Considerations of
Government Auditing Standards
Chapter and illustrations reflect new YB and many
AU-C sections as follows:
• AU-C 265, Communicating Internal Control Related Matters Identified in
an Audit
• AU-C 700, Forming an Opinion and Reporting on Financial Statements
• AU-C 705, Modifications to the Opinion in the Independent Auditor's
Report
• AU-C 720, Other Information in Documents Containing Audited
Financial Statements
• AU-C 725, Supplementary Information In Relation to the Financial
Statements as a Whole
• AU-C 730, Required Supplementary Information
• AU-C 905, Alert that Restricts the Use of the Auditor's Written
Communication
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Chapter 4 - SLG and NFP Financial Statement
Report Changes
Revised wording to adhere to new requirements in
both the clarity auditing standards and Government
Auditing Standards
Subheadings added
• Management's Responsibility
• Auditor's Responsibility
• Other Matters (e.g., reporting required supplementary
information or other information)
• Other Reporting Required by Government Auditing Standardsnew subheading describing the linkage to the reporting required
by YB
Minor change - standards indicate report should be
addressed to “appropriate addressee” and city and
state added
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Chapter 4 - Yellow Book Reporting Changes
Wording changes for clarity standards and YB
Reports now assume governmental entity; footnotes
provide revisions needed for NFPs
Added the title, “Independent Auditor’s Report”
Maintained the existing report subheadings of
"Internal Control Over Financial Reporting" and
"Compliance and Other Matters"
Reference to management letter no longer required
in YB report
Replaced the "restricted use alert" with a "purpose
alert" as required by AU-C 905
Access the clarified illustrative Government
Auditing Standards reports.
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Part II: Circular A-133 Audits
Changes relate primarily to the clarity
auditing standards
Most changes not considered significant
Chapters 6 (planning) and13 (reporting) had
the most changes
Significant changes for Part II in future
edition of this Guides once current single
audit reform efforts becomes effective
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Chapter 6 - Planning Considerations of
Circular A-133
Updated many standards references and wording
due to clarity
• No significant changes to practice as a result of these
changes
Group Audits (AU-C section 600)
• Expected guidance will likely indicate a limited impact
on GAS-A133 audits since each major program
opined on separately (limited aggregation risk)
• Other considerations when program administered by
multiple organizational units, locations, or branches
(already have sampling guidance for these situations)
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Chapter 13 - Auditor Reporting Requirements
and Other Communication Considerations in
a Single Audit
Chapter and illustrations reflect new YB and many
AU-C sections as follows:
• AU-C 265, Communicating Internal Control Related Matters Identified in
an Audit
• AU-C 700, Forming an Opinion and Reporting on Financial Statements
• AU-C 705, Modifications to the Opinion in the Independent Auditor's
Report
• AU-C 725, Supplementary Information In Relation to the Financial
Statements as a Whole
• AU-C 905, Alert that Restricts the Use of the Auditor's Written
Communication
• AU-C 935, Compliance Audits
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Chapter 13 - Auditor Reporting Requirements
and Other Communication Considerations in
a Single Audit
Wording changes for both clarity standards and YB
Used major headings to clarify that the reporting
includes several distinct reports
• Report on Compliance for Each Major Program (opinion-level
assurance)
• Report on Internal Control over Compliance (byproduct reporting
on internal control over compliance);
• Report on the Schedule of Expenditures of Federal Awards
(SEFA) - only if such in-relation-to reporting is included here
Report examples now illustrate in body of the report
how to report on the SEFA within the A-133 report;
not implying that this is a best practice
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Chapter 13 - Circular A-133 Report Changes
Use of subheads within the Report on Compliance
for Each Major Program similar to that used in a
financial statement audit report
No subheads used within the Report on Internal
Control Over Compliance
How opinion modification(s) on one or more major
federal programs modify the report wording and
how the use of subheads should be applied in this
context
Replaced the "restricted use alert" with a new
"purpose alert" and clarified that such an alert only
relates to the reporting on internal control over
compliance
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Chapter 13 - Circular A-133 Report Changes
Added example of how an auditor might include a
table within the report to more clearly articulate
findings that modify an opinion on a major federal
program or relate to material weaknesses,
significant deficiencies, or other noncompliance
findings (this change was unrelated to the clarity
standards)
How a paragraph relating to management's
response to findings is placed in both the Report on
Compliance for Each Major Program and the Report
on Internal Control over Compliance when there are
findings noted in each area
Access the clarified illustrative Circular A-133
reports.
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State and Local
Governments – Audit
and Accounting Guide
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SLG Chapter 1 – Overview and Introduction
AU-C 200 requires the auditor to express an opinion
on whether the f/s are presented fairly, in all material
respects, in accordance with an applicable financial
reporting framework
Take the opportunity to reinforce to your clients the
proper reporting framework based upon definition of
a government
Refer to definition of a government in paragraph
1.01 of the SLG Guide
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SLG Chapter 2 – Financial Reporting
Incorporates Statement No. 63, Financial Reporting
of Deferred Outflows of Resources, Deferred Inflows
of Resources, and Net Position
• Note that Statement No. 65, Items Previously Reported as
Assets and Liabilities, was not incorporated into the 2013 Guide
• Terminology changes
• Net assets is now net position
• Adds in elements ‘deferred outflows of resources’ (DOR)
and ‘deferred inflows of resources’ (DIR)
• Describes the Statement of Net Position
• Separate reporting (DOR/DIR not combined with
assets/liabilities)
• Cannot net DOR/DIR
• Presentation when there are multiple DOR/DIR
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SLG Chapter 4 – General Auditing Considerations
General Reorganization of the Chapter
• Much of the content is the same but the topics were reordered to
align with the flow of clarity standards and wording updated
Terms of Engagement (AU-C 210)
• Requires the auditor to determine if preconditions for an audit
are present
• Preconditions for an audit include, among other things, the
use by management of an acceptable financial reporting
framework in the preparation and presentation of the
financial statements.
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SLG Chapter 4 – General Auditing Considerations
Group Audits
• It can be analogized that each opinion unit is equivalent to its
own group and likely there would be no additional requirements
under AU-C section 600 if an opinion unit met the definition of a
component (unless the component was audited by other
auditors).
• Component versus component unit
• Making reference
• The GASB financial reporting framework allows certain
nongovernmental component units that report under the
FASB financial reporting framework, to be incorporated into
the reporting entity’s financial statements.
• In these circumstances, the group auditor may make
reference to the audit of a component auditor.
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SLG Chapter 4 – General Auditing Considerations
Group Audits
• Factors that auditors may consider in identifying components for
state and local governments include:
• Portion of audit performed by other auditors
• Governance, legal, and management structures
• Equity method investments
• Decentralization of operations
• Outsourcing of operations
• Nature of activities and uniqueness of relationship to the
entity
• Control environment
• Subsequent events
• GAQC Web event titled, Understanding the Potential Impacts of
the New Group Audits SAS on Your Governmental and Not-ForProfit Audit Engagements
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SLG Chapter 4 – General Auditing Considerations
Group Audits
Do any opinion units contain
more than one component
(excluding government-wide
financial statements)?
Yes
AU-C section 600
applies
Yes
AU-C section 600
applies
No
Is any opinion unit audited by
other auditors whose work will
be used as audit evidence for the
group audit?
No
No additional audit procedures
under AU-C section 600
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SLG Chapter 5 – Financial Instruments
Derivative Terminations (very narrow issue)
• GASB Statement No. 64, Derivative Instruments: Application of
Hedge Accounting Termination Provisions an amendment of
GASB Statement No. 53
• Provides guidance on ceasing hedge accounting when the
hedging derivative instrument is terminated unless an effective
hedging relationship continues. Provides the criteria for when an
effective hedging relationship continues.
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SLG Chapter 7 – Capital Assets
SLG Chapter 8 – Expenses/Expenditures/Liabilities
Guidance Added on GASB Statement No. 60,
Service Concession Arrangements (SCAs)
• Accounting and Financial Reporting by the Gov. Transferor
• Existing facility - continues to report existing facility as capital
asset.
• New facility or improvements to existing facility, transferor
reports
• A new facility or improvements as capital asset at fair
value when placed into operation,
• Any contractual obligations as liabilities,
• And a corresponding deferred inflow of resources equal
to the difference between (1) and (2).
• Note chapter 9 also has a brief discussion of SCAs
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SLG Chapter 7 – Capital Assets
SLG Chapter 8 – Expenses/Expenditures/Liabilities
Guidance Added on GASB Statement No. 60,
Service Concession Arrangements
• Accounting and Financial Reporting by the Gov. Operator
• Intangible asset for the right to access the facility and collect
3rd party fees form its operation
• Improvements to the facility by the operator should increase
the intangible asset
• Amortize the intangible asset over the term of the
arrangement in a systematic and rational manner
• Liabilities discussed in chapter 8
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SLG Chapter 10 - Net Position and Financial
Statement Reconciliations
Government-Wide Net Position
• Discuss the impact of DOR/DIR on components of the statement
• Net investment in capital assets
• Restricted net position
• Unrestricted net position
Proprietary Fund Net Position
• Paragraph 8 of GASB Statement No. 63 requires the residual
amount of all other elements be reported as net position rather
than net assets, proprietary fund balance or equity.
Disclosures
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SLG Chapter 11 – The Budget
Budgetary Compliance Procedures - AU-C 250
expanded work regarding noncompliance
• Obtain sufficient appropriate audit evidence regarding material
amounts and disclosures in the financial statements that are
determined by the provisions of those laws and regulations
generally recognized to have a direct effect on their
determination
• Further, the auditor should perform the audit procedures that
may identify instances of noncompliance with other laws and
regulations that may have a material effect on the financial
statements
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SLG Chapter 13 – Concluding the Audit
Considerations for an Emphasis of Matter
• Evaluate instances when there are indicators of substantial
doubt of the government’s ability to continue as a going concern,
but collectively the indicators do not meet the criteria under
GASB Statement No. 56.
• If indicators could significantly curtail the government’s ability to
continue to provide public services at the current level –
• Consider including an emphasis of matter paragraph to
assist users in understanding the financial position of the
government entity
Other changes were to align to wording in
AU-C but no major changes or expansion
from the extant AUs
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SLG Chapter 15 – Special Purpose Framework
Revisions address special considerations in the
application of professional standards to an audit of
f/s prepared in accordance with a special purpose
framework
• Cash, Tax, Regulatory, Contractual (similar to extant)
• Other Bases of Accounting: uses a definite set of logical,
reasonable criteria that is applied to all material items appearing
in financial statements.
• Report illustrations updated for Clarity
Additional Resources:
• AICPA’s Practice Aid: Applying OCBOA in State and Local
Governmental Financial Statements
• AICPA’s Practice Aid: Accounting and Financial Reporting
Guidelines for Cash- and Tax- Basis Financial Statements
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SLG Chapter 16 - Auditor Involvement with
Municipal Securities Filings
Terminology changed from ‘association’ to
‘involvement’
Situations triggering involvement remain unchanged
• Assisting in preparing the financial information included in the official statement
• Reviewing a draft of the official statement at the government’s request
• Signing (either manually or electronically) the independent auditor’s report for
inclusion in a specific official statement
• Providing written agreement (for example, through a consent letter or signed
authorization form) for the use of the independent auditor’s report in a specific official
statement
• Providing a revised independent auditor’s report for inclusion in a specific official
statement
• Issuing a comfort letter, the letter described in paragraph .12 of AU-C section 920,
Letters for Underwriters and Certain Other Requesting Parties, or an attestation
engagement report in lieu of a comfort or similar letter on information included in the
official statement
• Issuing a report on an attestation engagement relating to the debt offering
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SLG Chapter 16 - Auditor Involvement with
Municipal Securities Filings
Using Government Auditing Standards
Reports and References in the Official
Statement
• Determine if auditor’s report is present in the official statement
• Advisable to use a report on the f/s that does not refer to
Government Auditing Standards
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SLG Chapter 14 – Reporting
Terms to Highlight
• Basic Financial Statements
• Financial Statements
• Use of Terms ‘Opinion’ versus ‘Opinions’
Report Illustrations Reflect Many AU-C Sections
• Refer to AU-C to tailor your reports to specific scenarios
• AU-C 700, Forming an Opinion and Reporting on Financial
Statements
• AU-C 705, Modifications to the Opinion in the Independent Auditor's
Report
• AU-C 720, Other Information in Documents Containing Audited
Financial Statements
• AU-C 725, Supplementary Information In Relation to the Financial
Statements as a Whole
• AU-C 730, Required Supplementary Information
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SLG Chapter 14 – Reporting
Report Changes
• Fitting the state and local government opinion unit audit concept
into the new clarity reporting structure
• Multiple Opinions
• Changes that would be made and additional
subheadings that would be added when the auditor has
opinion modifications on one or more opinion units and
unmodified opinions on other opinion units
• The inclusion of an optional table within the report to
more clearly communicate when more than one type of
opinion is being issued and the nature of the opinions
issued (e.g., unmodified, qualified, adverse)
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SLG Chapter 14 – Reporting
Report Changes
• Report on the Financial Statements
• Define what has been audited – dependent upon the
engagement
• Wording diverges from AU-C 700 because of opinion units
• Management’s Responsibility for the Financial Statements
• Consistent across illustrations
• Auditor’s Responsibility
• Includes modifications for audits performed under
Government Auditing Standards – but auditors need to look
to the GAS A-133 Guide for more guidance
• Requires modification for opinion/opinions and reference to
other auditors
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SLG Chapter 14 – Reporting
Report Changes
• Unmodified Opinion(s) Only
• One opinion paragraph
• Header “Opinion” or “Opinions”
• More than One Type of Opinion Issued
• Illustrative Table – “Summary of Opinions”
• Basis Paragraph to Precede Modified Opinion
• Suggest identifying the opinion unit (OU) to which the
modification applies in the header
• Modified Opinion – refer to Basis paragraph and specific
OU’s to which the modified opinion applies
• Illustrated structure with multiple modifications
• Basis / Modified Opinion Basis/Modified Opinion
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SLG Chapter 14 – Reporting
Report Changes
• Other Matters
• Required Supplementary Information
• Other Information (OI)
• Includes reporting on Supplementary Information (SI)
when engaged to provide an in relation to opinion
• Reporting on OI when the auditor chooses to disclaim an
opinion on the OI
• Emphasis of Matter
• Primary Government That Omits the Financial Data of Each
Component Unit and That Issues Audited Financial
Statements for the Reporting Entity
• Fund/Department/Program Statements Only
• Report on Other Legal and Regulatory Requirements
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SLG Chapter 14 – Reporting
Adverse Opinion
• Change made to AU-C 705.32 Illustration 3, An Auditor’s Report
Containing an Adverse Opinion Due to a Material Misstatement
of the Financial Statements – not in the GAQC’s early release of
illustrations (Example A-10)
In our opinion, because of the significance of the matter
discussed in the Basis for Adverse Opinion paragraph, the
consolidated financial statements referred to above do not
present fairly the financial position of ABC Company and its
subsidiaries as of December 31, 20X1, or the results of their
operations or their cash flows for the year then ended in
accordance with accounting principles generally accepted in
the United States of America.
Access the clarified illustrative state and local
government financial reports.
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Not-for-Profit Entities –
Audit and Accounting
Guide
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NFP Guide Updates
NFP Entities
• The Guide covers entities that meet the definition of a NFP
included in the FASB ASC glossary. An entity that possesses the
following characteristics, in varying degrees, that distinguish it
from a business entity:
a. Contributions of significant amounts of resources from
resource providers who do not expect commensurate or
proportionate pecuniary return
b. Operating purposes other than to provide goods or
services at a profit
c. Absence of ownership interests like those of business
entities
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NFP Guide Updates
NFP Entities (Continued)
• The Guide also covers entities that clearly fall outside this
definition:
a. All investor-owned entities
b. Entities that provide dividends, lower costs, or other
economic benefits directly and proportionately to their
owners, members, or participants, such as mutual
insurance entities, credit unions, farm and rural electric
cooperatives, and employee benefit plans.
• Caveats…there are NFPs that meet the definition of an NFP
without possessing characteristics. For example, some NFPs,
such as those that receive all their revenue from exchange
transactions, receive no contributions.
Ensure you are using the correct Guide for your client!
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NFP Chapter 2 – General Auditing
Considerations – Clarity Implications
Terms of Engagement
Audit Planning
Group Audits
Materiality
Fraud and Errors
Compliance (Laws and Regulations)
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NFP Chapter 14 – Reporting – Clarity
Implications
Report Examples will be included in 2013 NFP Guide
Report Example in AU-C section 700, Forming an
Opinion and Reporting on Financial Statements
Report Example 4-2 in GAS-A133 Audit Guide
• Generally based on the report in NFP guide; modified to show
changes needed if audit also done under YB
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NFP Guide Updates - Overhaul
Posted for comment in late 2012
Addresses many new accounting issues that have
emerged over the years
Includes guidance dedicated specifically to not-forprofit entities
Some of the main areas addressed by overhaul
• Reporting relationships with other entities
• Reporting and measuring noncash gifts
• A new chapter on program-related investments and
microfinance loans
• Reporting the expiration of donor-imposed restrictions
• Suggestions for audit procedures an auditor might consider as a
supplement to the risk assessment procedures
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NFP Guide – Overhaul Web Event
AICPA Web Event Planned for May 1 on the 2013
NFP Guide.
Stay tune for registration information
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Clarity and Other
Resources to Assist You
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Clarity and Other GAAS Resources
Financial Resource Center – Audit and Attest
Services Section
• Section dedicated to Clarity
• Standards Tracker
• Highlights of Hot Topics
Guidance
• Summary of Differences Between Clarified SASs and Existing
SASs
• Summary of Clarified Auditing Reporting Standards
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Clarity and Other GAAS Resources
Publications
• Audit and Accounting Manual
• Audit Risk Alert: Understanding the New Clarified Auditing
Standards
• Practice Aid: Understanding the New Clarified Auditing
Standards
Web Events and AICPA TV Offerings
• Archived GAQC Web event titled, Implementing the Clarified
SASs in a Governmental and Not-For Profit Audit Environment:
What, When, and How?
• Archived GAQC Web event titled, Understanding the Potential
Impacts of the New Group Audits SAS on Your Governmental
and Not-For-Profit Audit Engagements
• AICPA TV
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2011 Yellow Book Resources
2011 Yellow Book
AICPA 2011 Yellow Book Independence - Nonaudit
Services Documentation Practice Aid
• Free to AICPA members in PDF format
• For-sale version that can be used to input information and save
as part of the audit documentation
Archived GAQC Web events
• The New 2011 Yellow Book: What You Need to Know Now
• 2011 Yellow Book Independence Practice Aid
AICPA – Government Auditing Standards
Independence Rules Comparison
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For Auditors Performing HUD For-Profit
Audits
GAQC Alert #214 – Draft Illustrative Reports
Posted for HUD Audits Performed Under
HUD Consolidated Audit Guide:
• a financial statement audit report for a HUD for-profit
recipient;
• the reporting to meet the requirements of
Government Auditing Standards as it relates to
reporting on compliance and other matters at the
financial statement level and internal control over
financial reporting; and
• the opinion on compliance for each major HUD
program and the related reporting on internal control
over compliance.
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Wrap Up and Questions
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How do I get my CPE certificate?
Just follow these steps:
1. Log on to CPA2Biz.com
2. Click on “My Account” at the top of the page and enter your
CPA2Biz/AICPA username and password
3. Click on “My Web Events” tab
4. Click on “AICPA Learning Center Transcripts and Certificates”
link (a new window or tab will open)
5. On the AICPA Learning Center, click on “My Transcript” in
the left-hand menu
6. Locate your completed course and click on “Go” to retrieve
your certificate.
Please note that it may take up to 24 hours for your certificate to be
placed into your account.
If you need assistance with locating your certificate, please contact
the AICPA Service Center at 888.777.7077 or [email protected]
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Web event
Click on the link below to begin a short
evaluation
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