AUD 5.08 - Single Audits

  1. Which type of entity receives a government single audit?
    Entities that receive ≥ $750,000 of federal assistance in a fiscal year.
  2. True / False: Entities that expend <$750,000/yr in federal assistance are exempt from federal audit requirements for that year.
    True
  3. What are the 2 main objectives of the government single-audit?
    • Audit of the entity’s FS (how well did you do with your money) plus reporting on a separate schedule of expenditures of federal awards in relation to the FS (how well did you spend the taxpayer's money)
    • Audit of compliance regarding federal awards expended during the year (did you do it correctly)
  4. What is the difference between a Type A vs Type B program?
    • Type A: A single program that received ≥ $750,000 /yr
    • Type B: All other programs
  5. Define a major program
    In general a Type A program that is not low risk, or a Type B program that is high risk.
  6. How is a program identified as higher risk using a risk-based approach?
    • Multiple internal control structures
    • Weak monitoring systems for subrecipients
    • Programs not recently audited as a major program
    • Complex eligibility requirements to participate in the program
    • Being in the early phase (new or untested) of a program’s life cycle
  7. How is a program identified as lower risk using a risk-based approach?
    • Single audits have been performed on an annual basis for 2 years OR as a major program for 1 of 2 years
    • The FS received an unmodified opinion
    • No material weaknesses were discovered in internal controls
    • No going concern contingencies were reported
    • And Type A programs with
    • ** no material weaknesses over compliance
    • ** questioned costs were <5% of the award expended
    • ** no modified opinion on major programs
  8. How is a program identified as a “major program”?
    • Step 1: Determine if Type A or Type B program
    • Step 2: For Type A, determine if low risk
    • Step 3: For Type B, determine if high risk
    • Step 4: Major programs are Type A that are not low risk, and Type B that are high risk
  9. How is materiality under a single audit different from materiality under a GAAS or even a GAAS + GAGAS audit?
    • Single-Audit: Separate materiality is created for the FS as a whole and in relation to each major program.
    • GAAS or GAAS+GAGAS: Materiality is in relation to the FS being audited as a whole
  10. Define a program-specific audit.
    Expenditures are made under only one program, and the terms of the award do not require a FS audit.
  11. The entity you're about to audit qualifies for a program-specific audit. What is the 1st thing you must do as the auditor?
    Contact the Inspector General of the applicable federal agency and obtain a current program-specific audit guide.
  12. A state receives funds from the federal Housing and Urban Development program (HUD), and gives some of that money to a local city for their HUD program. The state is labeled a ______________, while the city is labeled a ____________.
    • Recipient
    • Subrecipient
  13. How are the audit procedures under a single audit different than those under a specific programs audit?
    Single audits must include an audit of the FS as well as the specific programs while a specific programs audit does not include an audit of the FS as a whole.
  14. What system is used by the auditee to select an auditor to perform a single-audit?
    A competitive proposal process.
  15. The auditor provides the audit report to the auditee. When must the auditee submit the audit report to the appropriate government agencies
    • Within 30 days of receipt, and
    • within 9 months after the end of the audit period
  16. What are the format requirements for submitting the audit report?
    • Must be transmitted using a Data Collect Form as required by the OMB
    • Must be signed by a responsible official
    • Must include: FS, summary schedule of prior audit findings, auditor’s reports, corrective action plans
    • Must be submitted electronically
  17. The entity of a single audit is responsible for creating what 3 type of reports?
    • The FS
    • A schedule of federal expenditures
    • A list of corrective actions
  18. True / False: The auditor is responsible to understand and report on internal controls over compliance for all federal programs.
    • False
    • The auditor is not responsible for these items for any federal program deemed to be non-major.
  19. True / False: The auditor is not required to test controls that are ineffective.
    • True
    • But then additional tests of compliance must be considered
  20. The auditor of a single audit must render opinions in which areas?
    • The fair presentation of the FS
    • The fair presentation of the Schedule of Expenditures o Federal Awards (SEFA)
    • Major program (each one separately) internal controls over compliance with statutes, regulations, and terms and conditions of the related federal award
    • Summary schedule of prior audit findings
  21. True / False: The auditor is required to follow-up on audit findings from previous audits and perform procedures to assess the reasonableness of the summary schedule of prior audit finds prepared by the auditee.
    True
  22. Which 5 reports (with a brief description) must be created by the auditor of a single audit?
    • FS Report: Express an opinion regarding the fair presentation of the FS in accordance with GAAP
    • SEFA Report: Express an opinion regarding the fair presentation of the Schedule of Expenditures of Federal Awards
    • GAGAS (Yellow Book) Report: The scope and results of tests of internal controls and compliance, with reference to a separate Schedule of Findings and Questioned Costs
    • Single Audit Report: A report for each major program with an opinion plus scope of testing regarding compliance, and internal controls over compliance, and a reference to a separate Schedule of Findings and Questioned Costs
    • Schedule of Findings and Questioned Costs: A summary document (see separate flashcard)
  23. What information is contained in the Schedule of Findings and Questioned Costs
    • Whether the auditee qualified as a low-risk auditee
    • The type of opinion issued on the FS (unmodified, qualified, adverse)
    • Whether significant deficiencies or material weaknesses in internal control for the FS audit exist
    • GAGAS findings
    • Identification of any major programs
    • The dollar threshold used to distinguish between Type A and Type B programs
    • The type of opinion issued regarding compliance of each major program
    • Whether significant deficiencies or material weaknesses in internal control for each major program exist
    • Findings and questioned costs for federal awards
  24. What percentage of total awards expended must be tested for (1) low risk vs (2) high risk
    • 20%
    • 40%
  25. What audit findings is the auditor required to report?
    • Major Programs:
    • ** significant deficiencies, material weaknesses, material noncompliance, and significant instances of abuse
    • ** the reason if other than an unmodified opinion is given
    • Questioned costs of a given type of compliance requirement it those costs, in combination, exceed $25k.
    • Fraud affecting any federal award
    • Material misrepresentation, either of the deficiency or its implication, of the prior audit findings as prepared by the auditee
  26. How long must single audit documentation be retained and by whom?
    • 3 years
    • By both the auditor and the auditee
  27. 2 CFR 200 refers to what?
    The Single Audit Act
  28. REDO THE SIMULATION FOR THIS MODULE
    IT'S REALLY GOOD
Author
BethM
ID
332918
Card Set
AUD 5.08 - Single Audits
Description
Becker Review 2017
Updated