PPP Loans are an unprecedented program from the government, with auditing implications to match.
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PPP Loans are an unprecedented program from the government, with auditing implications to match.

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Audits conducted in accordance with generally accepted auditing standards (GAAS) are performed under the concept of a risk-based approach. In an effective audit, firms perform a risk assessment for both inherent risk and control risk and then design audit procedures responsive to those risks. Auditing Paycheck Protection Program (PPP) funds are no different. However, there are some unique factors that should be considered including:

  • Firm-wide quality control considerations

  • Understanding the risk profiles of the PPP loan accounting models

  • PPP loan eligibility testing concerns

  • Materiality

  • Disclosures

  • Management Representations

In response to multiple requests from CPEA members on the final point, we have also issued a full report covering illustrative management representations related to PPP loans.

Download the Report on auditing PPP loans

File name: Cpea-auditing-ppp-loans.pdf

Download the CPEA illustrative COVID management representations

File name: Cpea-covid-rep-letter.pdf

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