Financial audits of certain governmental entities are required to be performed in accordance with generally accepted government auditing standards (GAGAS) as issued in Government Auditing Standards. These standards do not require, as part of an auditor’s report, the inclusion of
A.A statement as to whether the tests performed provide sufficient appropriate evidence to support an opinion on internal control over financial reporting.
B.A description of the scope of testing of internal control over financial reporting.
C.Sampling methods used to test the controls designed to detect fraud whether or not material fraud is found.
D.The significant deficiencies, with identification of material weaknesses.
C.Sampling methods used to test the controls designed to detect fraud whether or not material fraud is found.
The Government Accountability Office (GAO) issues Government Auditing Standards (the Yellow Book). GAGAS apply to financial audits, attestation engagements, and performance audits. GAGAS for financial audits incorporate by reference the AICPA’s Statements on Auditing Standards (SAS) and also state requirements. However, they do not require that the report identify specific sampling techniques used to test the controls. Nevertheless, when presenting material fraud, auditors might consider the report contents standards for performance audits that pertain to, among other things, methodology. Thus, if sampling significantly supports the findings, the auditor might describe the sample design and state why it was chosen.
