AICPA Significantly Revises Two Governmental Auditing Guides

Guide for Performing Single Audits Updated for New OMB Uniform Guidance;State and Local Guide Addresses Audit Considerations for GASB’s New Pension Standards

July 27, 2015

NEW YORK (July 27, 2015) – The American Institute of CPAs (AICPA) has revised two key publications that are relied upon by auditors of governmental and not-for-profit entities that expend federal awards and those who audit state and local government financial statements. The guides are a facet of the AICPA’s Enhancing Audit Quality initiative.

The 2015 edition of the AICPA Government Auditing Standards and Single Audits, is an indispensable resource for auditors performing single audits of federal expenditures, as well as audits performed in accordance with Government Auditing Standards (the Yellow Book).

“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 Mary Foelster, CPA, CGMA, AICPA director of governmental auditing and accounting. Foelster oversees the Institute’s Governmental Audit Quality Center.

The audit requirements contained in the new Uniform Guidance for single audits generally become effective for December 31, 2015, year-end single audits and later. Audits performed prior to that time will be under OMB Circular A-133, but there are still Uniform Guidance implications for expenditure testing in those audits. 

This latest edition of the Guide, updated as of February 1, 2015, addresses this major change by:

  • Adding 10 new chapters that cover the new Uniform Guidance audit requirements in a new Part 3.

  • Continuing the existing chapters in Part 2 of the guide that cover Circular A-133 audit requirements.

  • Including transitional guidance at the end of many chapters in Part 2 and 3 providing guidance and audit considerations related to moving from Circular A-133 to the Uniform Guidance. 

The 2015 edition of the State and Local Governments, State and Local Governments, provides the latest authoritative guidance and critical “how-to” advice for audits of state and local governments.

A critical addition to this year’s guide, updated as of March, 1, 2015, is a comprehensive new chapter that addresses the accounting and financial reporting requirements under GASB’s new pension standards, as well as related auditing considerations for both audits of governmental pension plans and the employers that participate in those plans. “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 explained.

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 example audit procedures for the significant accounts of pension plans and provides specific adaptations for the various types of plans.  It also 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.

  • Two sections addressing GASB Statement No. 68 for participating employers including the assertions, identified risks of “what could go wrong,” and example audit procedures.  It also addresses the collaboration needed between plans and employers to obtain information needed by employers for financial reporting purposes.

  • Various Appendixes that provide nonauthoritative solutions to multiple-employer plan and related employer issues.