GAQC Alert No. 289 


GAQC Alert
 
New Pension Implementation Guidance and Governmental Audit Competency Resources
   
  AICPA
October 13, 2015
GAQC Alert #289
 
In This Alert
New Governmental Pension Guidance
Governmental Audit Competency Resources
Do You Audit Recipients of LSC Funds?
If so, you may want to let your clients know that the Legal Services Corporation (LSC) has issued an Advanced Notice of Proposed Rulemaking in a recent Federal Register notice that requests feedback on potential changes to certain compliance requirements that LSC recipients have to follow. Comments are due by December 8, 2015.
Single Audit Fundamentals
Do you have staff that need a strong basic understanding of performing a single audit? If so, sign them up for the upcoming GAQC Web event series beginning on Friday, October 23rd. See GAQC Alert #288 for more information.
Additional Resources
GAQC Alerts

Archived GAQC Web Events

Audit Practice Aids and Tools

HUD Information
Dear Center Members
The purpose of this GAQC Alert is to inform members of two important recent developments as follows:
  New guidance issued by the AICPA State and Local Government Expert Panel (SLGEP) relating to governmental pension plans and the employers that participate in those plans; and
  A new competency framework relevant to state and local governmental financial statement audits, single audits and Yellow Book audits, as well as a new knowledge assessment and learning tool.
Read on for more information about each of the above and to learn how to access each resource.
New Governmental Pension Guidance
As has been noted in numerous GAQC Alerts, the last few years have been filled with developments in the governmental pension arena. As entities and their auditors have gotten further along in implementing Governmental Accounting Standards Board (GASB) Statement No. 68, Accounting and Financial Reporting for Pensions, the AICPA has received a number of new inquiries. In response, the AICPA SLGEP has issued a non-authoritative article titled, Emerging Pension Issues, which summarizes the more significant inquiries and provides related guidance and best practice commentary.

Auditors of plans and employers are strongly encouraged to consider the issues and related discussion in the article. The intent of the article is to build an awareness of the issues and to assist auditors in addressing them. Please note that the article is nonauthoritative and has not been approved, disapproved, or otherwise acted upon by any senior committee of the AICPA.

Topics addressed in the article include:
  Implementation Issues for Cost-Sharing Employers: Calculating a Change in Proportion and Audit Evidence on Beginning Net Pension Liability;
  Effect of Employer-Paid Member Contributions on Plans and Employers;
  Additional Illustrative Schedule of Pension Amounts by Employer for Cost-Sharing Plans;
  Employer’s Presentation of Net Position;
  Allocation of Pension Amounts to Funds and Departments; and
  Audit Evidence on Intra-Entity Allocations.
The article has been posted to the GAQC’s “GASB Pensions: Issues and Resources” Web page.
Governmental Audit Competency Resources
The GAQC has been working closely with the AICPA’s Member and Learning Competency Team over the last year as they developed several important tools and resources related to competency in governmental auditing, including single audits. As noted in Government Auditing Standards (the Yellow Book), staff assigned to perform the audit must collectively possess adequate professional competence needed to address the audit objectives and perform the audit. Further, the Yellow Book states that maintaining competence through a commitment to learning and development throughout an auditor’s professional life is an important element for auditors since competence enables an auditor to make sound professional judgments. The following describes two new tools for auditors to use in considering and evaluating competence. It also describes a future single audit certificate program that will be coming in 2016.

Governmental Competency Model. The AICPA Competency Framework: Governmental Auditing (the Framework) is designed to help CPAs understand the knowledge and skills necessary to perform high-quality state and local governmental financial statement audits, single audits and Yellow Book audits. The Framework is underpinned by the need for objectivity, integrity and ethical behavior, and includes a commitment to continuously acquire new skills and knowledge. The governmental auditing technical competencies are organized into five core skill sets:
  Client acceptance;
  Engagement planning;
  Engagement analysis or testing;
  Concluding the engagement; and
  Guiding principles.
The Framework then identifies specific skills within each of the above core skill sets. The skills for each core skill set are provided for those at the foundational, intermediate, advanced and expert levels. Download the free AICPA Competency Framework: Governmental Auditing.

Knowledge Checks and Targeted Learning Resources. Additionally, the AICPA | CIMA Competency and Learning Web site has been expanded to include knowledge checks and targeted learning resources for state and local governmental financial statement audits, single audits and Yellow Book audits. Knowledge checks are provided for the following topics and subtopics (note that Yellow Book knowledge checks will be added in the near future).

Governmental Financial Statement Audits.
  GASB Accounting Requirements;
  Audit Risk Assessment;
  Opinion Units and Materiality;
  Sampling;
  Group Audits;
  Pensions; and
  Fair Value.
Single Audits
  Single Audit Requirements;
  Major Program Determination;
  Schedule of Expenditures of Federal Awards
  Materiality;
  Internal Control;
  Compliance Testing;
  Sampling; and
  Findings.
Individuals can take the knowledge check assessments in each of the above areas to help identify growth areas. The site also provides recommended learning resources in growth areas such as publications, self-study courses, webcasts and more. The learning content is served up in a competency framework-based approach, allowing users to sharpen skills and advance in areas of importance to both individuals and their firm or State Audit Organization. Access the governmental knowledge checks section of the AICPA | CIMA Competency and Learning Web site to get started! Additionally, access the learning section of the AICPA | CIMA Competency and Learning Web site to explore governmental audit learning resources.

Upcoming Single Audit Certificate Program. Looking to the future, in 2016 the AICPA will offer an exam-based single audit certificate program to provide a way for highly proficient practitioners to demonstrate their competencies and to distinguish themselves in the marketplace. The GAQC is working closely on this project and will inform members of related developments as time progresses.
*   *   *   *   *
Sincerely,

AICPA Governmental Audit Quality Center
 
Stay Informed

To stay abreast of these and other relevant events, visit the GAQC Web site. Also, we welcome any suggestions or questions.  Please send them by e-mail to GAQC@aicpa.org

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