CPAs and Advisors with Your Growth in Mind

Government Accountability Office Revises Yellow Book Standards

The U.S. Government Accountability Office (“GAO”) has updated its generally accepted government auditing standards to improve the quality of governmental audits. Commonly known as the “Yellow Book,” the revised standards supersede their 2011 counterparts and provide transparency and accountability for auditors when providing the public with unbiased analysis and information. Some of the changes include reformatting the chapters that distinguish requirements from application guidance, adding a definition for waste and related examples, and specific considerations for when internal control is significant to the audit objectives for performance audits. The revised standards must be applied to financial audits, attestation engagements, and. Read More.

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CAQ Board Issues Four Grants for Auditing Research

The Center for Audit Quality’s (“CAQ”) Research Advisory Board grant program recently announced it will fund the following academic research projects focused on how audits are conducted: “How Can Audit Committee Support Improve Auditors’ Application of Professional Skepticism?” by Joseph F. Brazel (North Carolina State University), Anna Gold (Vrije Universiteit Amsterdam), and Tammie Schaefer (University of Missouri – Kansas City) “‘Alexa, Audit Loan Grades’: Enhancing Auditor Reliance on Artificial Intelligence Through Anthropomorphism” by Sean Dennis and Benjamin P. Commerford (University of Kentucky) “Encouraging Relational Thinking to Enhance Auditor Use of Audit Data Analytics Output” by Cassandra Estep, Bright Hong, and. Read More.

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2018 NDAA: Changes to TINA Threshold and Incurred Cost Audits

In November, the conference committee for the National Defense Authorization Act (“NDAA”) for fiscal year 2018 completed one of the final steps in the NDAA process filing its report reconciling the differences between the House version and the Senate version of the legislation. Shortly after the reports were reconciled, the conference report was officially enacted into law as the fiscal year 2018 NDAA. This bill authorizes fiscal year 2018 appropriations and sets forth policies for Department of Defense (“DOD”) programs and activities. One of the major changes in the fiscal year 2018 NDAA, Section 811, is the increase in the. Read More.

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No More DCAA Performing ICS Audits?

No more Defense Contract Audit Agency (“DCAA”) auditors auditing your company’s incurred cost submission? It could happen! As a result of the 2018 National Defense Authorization Act (“NDAA”) signed by President Trump on December 12, 2017, it is a real possibility for an independent accounting firm to audit your incurred cost submission instead of auditors from the DCAA. Under the NDAA, which outlines defense spending priorities for the new fiscal year and established federal funding levels, there is a provision for the Department of Defense (“DoD”) to start using private auditors to perform some incurred cost audits. The idea is. Read More.

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PCAOB Standard-Setting Update as of December 31, 2017

The following reflects the Public Company Accounting Oversight Board’s (“PCAOB”) updated standard-setting agenda as of December 31, 2017: Auditing Accounting Estimates, Including Fair Value Measurements: Considering a recommendation for the next PCAOB action. The Auditor’s Use of the Work of Specialists: Considering a recommendation for the next PCAOB action. Supervision of Audits Involving Other Auditors: Reviewing comments on the supplemental request for comments and planning the next steps. Going concern: Covering outreach, monitoring, and research efforts. Along with the release of its revised standard-setting agenda, the PCAOB has added four projects to its research agenda. The projects involve quality control standards, changes in the use of data and technology in audits, the auditor’s role. Read More.

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PCAOB Staff Inspection Brief Reveals Audit Problems Continue

Public Company Accounting Oversight Board (“PCAOB”) inspectors continue to find the same issues during accounting firm inspections that were discovered in previous years. In its 18-page Staff Inspection Brief: Preview of Observations from 2016 Inspections of Auditors of Issuers, the PCAOB identified the following recurring audit deficiencies last year: Auditors’ assessments and responses to the risk of material misstatements Audits of internal controls over financial reporting (“ICFR”) Audits of accounting estimates such as fair value measurements Of the three audit deficiencies identified, the audits of internal controls were the most cited problem among accounting firms. The more common ICFR deficiencies. Read More.

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