Proposed Changes to Government Auditing Standards
By Jeffrey C. Shaver, CPA, Partner
The U.S. Government Accountability Office (GAO) has proposed changes to Government Auditing Standards (GAS). These changes will be the first changes since 2011 and are designed to ensure the standards continue to meet the needs of the Federal, State and local government communities as well as the public that these bodies serve.
Key New Audit Requirement
Among the proposed changes, the following significant new audit requirement was added to the 2017 exposure draft of the proposed new standards:
As part of an audit under Government Auditing Standards, if auditors become aware of waste or abuse that could be quantitatively or qualitatively material to the financial statements, auditors should perform additional audit procedures to ascertain the potential effect on the financial statements.
Definitions: Waste and Abuse
Included in the guidance are these definitions:
Waste
Waste is the act of using or expending resources carelessly, extravagantly, or to no purpose. Waste involves the taxpayers not receiving reasonable value for money in connection with any government-funded activities because of an inappropriate act or omission by parties with control over or access to government resources.
Importantly, waste can include activities that do not cover abuse and does not necessarily involve a violation of law. Rather, waste relates primarily to mismanagement, inappropriate actions, and inadequate oversight.
Standby
As the exposure draft makes its way through the various governmental stakeholders as it reaches finality, we will provide our public sector clients and other readers with significant information which will, in all likelihood, affect their agencies and organizations.
Contact Us
The Government Services Division of PKF O’Connor Davies, LLP is a leading tri-state area provider of accounting, auditing and advisory services for governmental agencies and related organizations. Please contact any of the individuals listed below or your client services team with questions or service requests:
Jeffrey C. Shaver, CPA, Partner (NY)
jshaver@pkfod.com
Scott P. Oling, CPA, Partner (NY)
soling@pkfod.com
David Gannon, CPA, Partner (NJ)
dgannon@pkfod.com
Joseph Centofanti, CPA, Partner (CT)
jcentofanti@pkfod.com