Checklist for Review of Financial Audits Performed by the OIG_part2 doc

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Governmental Financial
Auditing
The Yellow Book standards are often called
generally accepted government auditing
standards (GAGAS).
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Financial Audit and Reporting
Requirements – Yellow Book
 Compliance auditing
 Materiality and significance
 Reporting
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Audit and Reporting – Single Audit
Act and OMB Circular A-133
The threshold for requiring a single audit is $500,000.
The office of Management and Budget issued
a revised Circular A-133, Audits of States,
Local Governments, and Non-Profit
Organizations, to provide administrative
guidance for implementing the
single audit requirements.
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Audit Requirements
The audit should be in accordance with

generally accepted government auditing
standards (GAGAS).
The auditor must obtain an understanding
of internal control over federal programs
sufficient to support a low assessed
level of control risk for major programs.
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Audit Requirements
The auditor should determine whether the client
had complied with the laws, regulations, and the
provisions of contracts or grant agreements
that may have a direct and material effect
on each of its major programs.
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Reporting Requirements
 An opinion as to whether the schedule of
federal awards is presented fairly in all
material respects in relation to the
financial statements as a whole
 An opinion on whether the financial
statements are in accordance with GAAP
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Reporting Requirements
 A report on internal control related to the

financial statements and major programs
 A report on compliance with laws,
regulations, and the provisions of
contracts or grant agreements
 A schedule of findings and questioned costs
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Operational Auditing
 The purpose of operational auditing is to
determine the effectiveness or efficiency
of any part of an organization
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Learning Objective 3
Distinguish operational auditing
from financial auditing.
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Differences Between Operational
and Financial Auditing
 Distribution of the reports
 Inclusion of nonfinancial areas
 Purpose of the audit
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