Updated Clarity Illustrative Reports - Government Auditing Standards, OMB Circular A-133, U.S. Housing and Urban Development and State and Local Governments 


    The following describe the updated illustrative reports being released by the GAQC. All have been updated for the clarity auditing standards and the 2011 Government Auditing Standards. Auditors should exercise professional judgment in any situation not specifically addressed in the illustrative reports provided below.

    Government Auditing Standards Report Illustrations (Including a Financial Statement Report Illustration for a Government and a Not-for-Profit Entity)

    These illustrative reports are excerpts from Appendix A of chapter 4 of the AICPA Audit Guide, Government Auditing Standards and Circular A-133 Audits. They have been reviewed by members of the AICPA Auditing Standards Baord, the Government Accountability Office, and various federal agency representatives. These report illustrations will also be incorporated into the 2013 edition of the GAS-A-133 Guide to be released in late Spring 2013.

    The illustrations include a financial statement report audit report for a state or local government and one for a not-for-profit organization where the audit is being performed under both AICPA generally accepted auditing standards and Government Auditing Standards. Additionally, the illustrations include various examples of the reports issued to meet the reporting requirements of Government Auditing Standards for internal control over financial reporting and compliance and other matters. All reports reflect the requirements of the 2011 Government Auditing Standards and various clarity auditing standards including AU-C section 700, Forming an Opinion and Reporting on Financial Statements (AICPA, Professional Standards) and AU-C section 265, Communicating Internal Control Related Matters Identified in an Audit (AICPA, Professional Standards).


    OMB Circular A-133 Report Illustrations

    These illustrative audit reports are excerpts from Appendix A of chapter 13 of the AICPA Audit Guide, Government Auditing Standards and Circular A-133 Audits. They have been reviewed by members of the AICPA Auditing Standards Board, the Government Accountability Office, and various federal agency representatives. These report illustrations will also be incorporated into the 2013 edition of the GAS-A133 Guide to be released in late Spring 2013.

    The illustrations include various examples of the reports issued to meet the reporting requirements of Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations (Circular A-133) for compliance for each major federal program and internal control over compliance. All reports reflect the requirements of the 2011 Government Auditing Standards and various clarity auditing standards including AU-C section 935, Compliance Audits (AICPA, Professional Standards).

     

    State and Local Government Financial Statement Report Illustrations

    These five illustrative audit reports are excerpts from chapter 14 of the AICPA Audit and Accounting Guide, State and Local Governments (SLG Guide).  They have been reviewed by members of the AICPA Auditing Standards Board.  These report illustrations will also be incorporated into the 2013 edition of the SLG Guide to be released in late Spring 2013.

    The illustrations include various examples of financial statement audit reports for a state or local government when the audit is being performed only under AICPA generally accepted auditing standards.   All reports reflect the requirements of various clarity auditing standards including AU-C section 700; AU-C section 705, Modifications to the Opinion in the Independent Auditor's Report (AICPA, Professional Standards);  AU-C section 720, Other Information in Documents Containing Audited Financial Statements (AICPA, Professional Standards); AU-C section 725, Supplementary Information In Relation to the Financial Statements as a Whole (AICPA, Professional Standards); and AU-C section 730, Required Supplementary Information (AICPA, Professional Standards). The illustrative reports included here represent only a portion of the reports from chapter 14 of the SLG Guide.  The 2013 edition of the SLG Guide will include the full set of examples. 


    NEW HUD Report Illustrations

    These report illustrations are only applicable to our members that perform audits of for-profit entities that are subject to audits under the Consolidated Audit Guide for Audits of HUD Programs (HUD Guide). As noted in GAQC Alert #214, when HUD issued an update to Chapter 2, Reporting Requirements and Sample Reports, of the HUD Guide, the transmittal of the chapter indicated it did not include report illustrations. Instead, HUD asked the AICPA to provide it with updated “clarified” illustrations. With the issuance of GAQC Alert #214, the GAQC released drafts of the updated clarified reports that were sent to HUD for approval and issuance.  HUD has now issued the final clarified reports and incorporated them into the version of Chapter 2 on its Web site.

     Access the updated chapter 2 which includes illustrative reports.
    Access the HUD transmittal announcing the addition of the illustrative reports.
     
    For the most part, there were no substantive changes made by HUD to the reports that were provided by the GAQC.  However, during the clearance process, HUD removed a footnote that had been included in the draft illustrative HUD major program compliance and internal control over compliance report.  The footnote stated the following:  “Note that for entities subject to an audit in accordance with Chapter 7 of this Guide, staff from the HUD Recertification Branch have indicated that when such entities have been approved as both a Title I and a Title II lender, HUD considers the lender to have one major HUD program.  Therefore, the auditor’s testing and related reporting should result in an opinion on the one major HUD program.”  In speaking with the HUD Recertification Branch Chief about the reason for the footnote deletion, he stated that the deletion was made due to feedback received from other areas of HUD during the report clearance process.  He also offered assurance that his office does not expect auditors that followed the guidance in the footnote to take any follow-up action and that there was no plan to reject reports or take any other action towards auditors that followed the guidance in the footnote for their completed 12/31/12 year-end audits or those that are near completion.  With regard to audits of year-ends after 12/31/12, the Recertification Branch will work to develop guidance that further explains the impact of the footnote deletion on major program identification and testing.  The GAQC will closely monitor this situation and communicate any guidance issued by the Recertification Branch in the future.




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