1. Governmental Audits AICPA early work GAO and Comptroller General Need for extended audit work Government Audit Standards Yellow Book + Revisions Single Audit Act of 1984 Circular A-128 & 133 (Rev 1997) AICPA SOPs Single Audit Act Amendment of 1996

2. Governmental & NPO Auditing State, Local, and Federal Government General Accounting Office and Comptroller General of U. S. AICPA – “Audits of State and Local Governments” Legislative Bodies Non-government NPOs Internal Revenue Service Auditing Standards Board-AICPA GAO and Comptroller General of U.S. (1984)

3. GAGAS Audits Different Types of Audits Financial Fair presentation in conformance with GAAP Attestation Engagements May be financial or non-financial Assertion about a matter and reporting thereon Performance Audits Systematic examination that assesses performance of management and organizations toward meeting objectives; Aims are to improve programs (Effectiveness and Efficiency) Service Efforts and Accomplishments Trend

4. Governmental Audits-Reporting Standards Procedure paragraph and “accepted in the United States of America.” (p. 391) Opinion on Compliance and Internal Control System Opinion on Federal Financial Assistance Programs In Relation to Opinion on the Schedule of Federal Awards Report to describe instances of fraud, etc.

5. Single Audit Act & Amendments (1984) One single audit that assured that federal and state fund expenditures were in accordance with law and grant agreements Originally applied only to S & L Governments with $25,000 or more Federal Financial Assistance Circular A-133 extended to NG NFP organizations Cognizant ($50 Million)and Oversight Agencies

6. Single Audit Act(1996 Amendment) Increased Threshold Amount to $300,000 ($500,000 in 2004) Included hospitals as coverage under the act In 1997, AICPA issued SOP 98-3 Auditing of S & L Governments and Nonprofit Organizations Receiving Federal Awards

7. Auditing FFA Awards Major programs audited according to 50% or 25% rule risk-based approach Categorize programs as Type A – Larger programs Type B - Smaller programs Type A are major programs unless low-risk (audited within past 2 years with no major audit findings) Type B are major programs only if high-risk Refer to example on page 395

8. Non-government NPO Audits Not publicly held so not required to have annual audits of financial statements However, most medium to large organizations will go through independent audits as a matter for their own protection Must apply for tax exemption through the Internal Revenue Service with Form 1023 May have unrelated business income on which must pay taxes Annual Form 990 filed with IRS (See pages 400-401) Includes UBIT if applicable Last three year’s copies of 990 must be provided upon request by interested parties