CONTENTS
Part I: Background of Federal Auditing
Chapter 1: Background of Federal Auditing
Auditing the Federal Government: Definition and Scope
Federal Auditing: Who Sets the Standards?
Chapter 2: Federal Audit Criteria
The Constitution: “The Power of the Purse”
Anti-Deficiency Act: Cannot Spend More Than Congress Provides
Budget and Accounting Act of 1921
Budget and Accounting Procedures Act of 1950: Strengthened Federal Financial Practices
Supplemental Appropriations Act of 1951: Define the Legal Form for Federal Obligations
Impoundment Control Act of 1974: Congressional Budget Office, New Fiscal Year, and More
Federal Managers’ Financial Integrity Act of 1982
Single Audit Act of 1984: One Audit, Once A Year, by One Auditor
Federal Credit Reform Act of 1990: Full Cost of Loans and Loan Guarantees Must Be Budgeted
Government Performance and Results Act of 1993, Amended in 2010
Federal Financial Management Improvement Act of 1996
Accountability for Tax Dollars Act of 2002
Improper Payment Information Act of 2002, Amended in 2010 and 2012
Department of Homeland Security Financial Accountability Act of 2004
Federal Funding Accountability and Transparency Act of 2006
Chapter 3: Selected Issues in Federal Financial and Internal Control Reporting
An Emphasis on Internal Control Over Financial Reporting
Internal Controls: Reporting by Federal Agencies
Assessing Internal Control Over Financial Reporting
OMB Internal Control Deficiencies
Gao’s Government Auditing Standards: No Audit of Internal Controls Over Financial Reporting
Part II: Federal Budgeting, Accounting, and Financial Statements
Chapter 4: Accounting in the Federal Government
PPBS, ZBB, and MBO Budget Concepts
Federal Accounting: Process, Definitions, Transactions, Life Cycle
Nature of Congressional Allocations
Nature of An OMB Apportionment
Nature of Federal Entity Allotments
Chapter 5: Federal Financial Statements
Introduction to Federal Financial Statements
Historical Emphasis of Federal Financial Reporting
Hierarchy of Accounting Principles for Federal Entities
Federal Government’s Accounting Hierarchy
Reporting by Departments, Agencies, and the Government as A Whole
Government-Wide Financial Statements
Part III: Auditing in the Federal Government
Recent Developments in Federal Guidance
Chapter 7: The Federal Audit Model
Government Auditing Standards: Not Stand-Alone Standards
Audit Tests, Procedures, and Activities
Planning to Fill the Knowledge Gaps
Planning Phase: Do it Early, Do it Continuously
Audit Models, Audit Checklists: No Substitutes for Judgment
Understand the Federal Auditee: Each is Unique
Audit Techniques and Sources of Information: How to Achieve an Understanding of the Agency
Put the Understanding to Use: Develop the Initial Audit Approach
Audit Team Meetings: What Do We Think?
Document the Planning Phase: Gantt Chart the Audit Approach
Specific Control Evaluation Worksheet
Chapter 9: Documenting Internal Controls
Internal Controls, Definitions, and Requirements
Internal Controls, A Historical Perspective
Internal Control Evaluation Requirements
Completing and Documenting the Auditor’s Understanding of Internal Controls
Chapter 10: Assessing and Evaluating Control Risks
Finalize and Document the Audit Approach
Chapter 11: Test of Controls, Transactions, and Accounts
Walk-Throughs and Tests of Control
Tests of Controls are not Effective Tests for Transaction Accuracy
Information Technology Considerations
Outsourcing Accounting and Data Services
Chapter 12: End-of-Audit, Quality Control, and Reporting Procedures
Obtain Management and Legal Representation Letters
Final Critique of Audit Plan, Programs, and Procedures
Audit Quality Control Review and Validation
Issuing the Independent Auditor’s Reports
Illustrative Independent Auditor’s Report
Illustrative Independent Auditor’s Report on Internal Control and Compliance and Other Matters
Illustrative Independent Auditor’s Report on Special-Purpose Financial Statements
Part IV: Nature of Selected Federal Audits
Chapter 13: Auditing and Evaluating Federal IT Systems
Understanding the Need for it Security
Understanding Key Laws and Regulations on Information Security
Privacy and the Expanded Requirements in Federal it Audits
Growing Demand for it Audit and Information Assurance Services
Chapter 14: Performance Audits
Performance Auditing: Minimal Guidance, no Safe Harbors
Fieldwork Standards: Planning, Supervision, Sufficient and Competent Evidence, Documentation
Reporting Standards: Written Reports, Report Content, Quality Reporting, Report Distribution
Structuring A Performance Audit: Interesting, Challenging, and Not Without Risk
Overview of Performance Audit Process: Plan, Do, Review, Report
Orientation Phase: With Arrangers of Audit and Auditee
Review Risks and Issues: Winnow Down Audit Areas
Conduct the audit: Get the Facts, Findings
Report of Audit: Briefings and Interim and Final Reports
Chapter 15: Procurement Audits, Contract Audits, and Grant Audits
OMB’s Compliance Audit Supplement
Allowable/Unallowable Cost Criteria
American Recovery and Reinvestment Act