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

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

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

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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.

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(1984) One single audit that assured that federal and state fund expenditures were in accordance with law and grant agreements
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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

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

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Major programs audited according to 50% or
25% rule risk-based approach
Categorize programs as
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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

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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