Statements of Position



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The issuance in 1972 of the United States Accounting Office's Standards for the Audits of Governmental Organizations, Programs, Activities and Functions significantly expanded the meaning of the word audit when it is to be applied to governmental and government funded activities. As a result, the CPA engaged to perform a governmental audit may now be expected to do far more than in the past. In addition to the traditional examination of financial statements in accordance with generally accepted auditing standards, expanded governmental audits may be concerned with the following questions: 1. Is the entity managing or utilizing its resources in an economical and efficient manner? 2. Is the entity achieving the desired results or benefits? 3. Are the entity's operations in compliance with applicable laws and regulations beyond those relevant to a financial audit? The additional audit objectives designated by the GAO may pose extensive challenges for the practitioner who chooses to conduct expanded governmental audits. He will be called upon to use not only his financial auditing and accounting skills, but a variety of management advisory services skills as well. He will, in fact, be conducting audits which will require judgments based on expertise which may not be available within his staff and which are normally associated with other professional disciplines, such as engineering, medicine, social sciences, and public administration. The CPA undertaking such engagements, therefore, should be aware of the potential problems associated with these additional requirements and should understand how existing AICPA standards apply to expanded scope audits. The purpose of this document is to guide the CPA considering participation in an audit engagement for any entity at the federal, state or local levels to which the GAO audit standards apply. The GAO's document does contain the basic information about the audit standards, but certain ramifications for public accounting firms are not always clear. The standards were written for governmental audit agencies as well as public accounting firms.

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Finance, Public -- United States -- Accounting; Finance, Public -- United States -- Auditing


Accounting | Taxation


Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Guidelines for participation in government audit engagements to evaluate economy, efficiency and program results; Exposure draft (American Institute of Certified Public Accountants), 1976, May



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