AICPA Updates Government Auditing Guides

The American Institute of CPAs has revised two publications used by auditors of governmental and not-for-profit entities that spend federal awards and those who audit state and local government financial statements.

The 2015 edition of the AICPA Audit Guide, Government Auditing Standards and Single Audits, is aimed at auditors performing single audits of federal expenditures, along with audits performed in accordance with Government Auditing Standards, also known as the Yellow Book. The audit requirements contained in the new Uniform Guidance for single audits generally become effective for Dec. 31, 2015, year-end single audits and later. Audits performed before that time will be under OMB Circular A-133, but there are still Uniform Guidance implications for expenditure testing in those audits.

The latest edition of the guide, updated as of Feb. 1, 2015, addresses this major change by adding 10 new chapters that cover the new Uniform Guidance audit requirements in a new Part 3. The new guide also includes transitional guidance on audit considerations related to moving from Circular A-133 to the Uniform Guidance. 

“In particular, this year’s guide provides critical information for auditors to manage the transition from performing single audits under OMB Circular A-133 to the new OMB Uniform Guidance regulation for single audits,” said AICPA director of governmental auditing and accounting Mary Foelster, who oversees the Institute’s Governmental Audit Quality Center.

The other updated guide, the 2015 edition of the AICPA Audit and Accounting Guide, State and Local Governments, provides the latest authoritative guidance and critical “how-to” advice for audits of state and local governments. It includes a new chapter on the accounting and financial reporting requirements of the Governmental Accounting Standards Board’s new pension standards, along with related auditing considerations for both audits of governmental pension plans and the employers that participate in those plans.

The guide’s new pension chapter includes a section addressing GASB Statement No. 67 for governmental plans, including the assertions, identified risks of “what could go wrong,” and examples of audit procedures for the significant accounts of pension plans.

It also provides specific adaptations for various types of plans. The guide addresses the relevance of census data for each type of plan and provides practical resources such as audit strategies and example assertions and reports related to census data. 

The revised guide also adds two sections addressing GASB Statement No. 68 for participating employers, including assertions, risks of “what could go wrong,” and examples of audit procedures. It also addresses the collaboration needed between plans and employers to obtain information needed by employers for financial reporting purposes. Various appendixes provide nonauthoritative solutions to multiple-employer plan and related employer issues.

“The audit considerations surrounding governmental pensions are complex, and this new comprehensive chapter will be a key resource for helping auditors and entities gain an understanding of the issues,” Foelster said in a statement.

Both guides are part of the AICPA’s Enhancing Audit Quality initiative.