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Wiley Federal Government Auditing: Laws, Regulations, Standards, Practices, and Sarbanes-Oxley, 2nd Edition

Book Description

The most practical, authoritative guide to Federal Government auditing

Now in its second edition, Wiley Federal Government Auditing is authored by four CPAs who are partners at Kearney & Company, a CPA firm that specializes in providing auditing, accounting, and information technology services to the Federal Government. This single-source reference provides you with up-to-date information on applicable laws, regulations, and audit standards.

Created for both professionals and others performing Federal Government audits, this guide condenses the abundant, complex criteria for Federal Government auditing into concise, accessible topics you'll refer to frequently and presents:

  • An easy-to-navigate format that allows you to find needed information quickly

  • Detailed guidance on what, why, how, and by whom Federal audits should be made

  • Discussion on internal control over Federal financial reporting

  • Recent developments in auditing standards

  • Federal financial statements, budgeting, accounting, and more

  • Coverage of the scope and work required in an audit of Federal departments and agencies

  • Examples of Federal audits

  • Separate chapters devoted to auditing and evaluating Federal IT systems; performance audits; procurement and contract audits; and grant audits

  • Written in a non-technical style and complete with helpful exhibits, this guide is a "go-to" reference for government auditors, Inspectors General, public accountants, military comptrollers, legislators, state and local government auditors, budget offices, financial managers, and financial analysts. The content also applies to contractors and grantees, universities, and other nonprofits and organizations that have repeated financial dealings with the Federal Government.

    Table of Contents

    1. Cover
    2. Contents
    3. Title
    4. Copyright
    5. Preface
    6. Part I: Background of Federal Auditing
      1. Chapter 1: Background of Federal Auditing
        1. Auditing and Government
        2. Auditing the Federal Government: Definition and Scope
        3. Federal Auditing: Who Sets the Standards?
        4. Types of Governmental Audits
        5. Organization of the Book
      2. Chapter 2: Federal Audit Criteria
        1. The Constitution: “The Power of the Purse”
        2. Anti-Deficiency Act: Cannot Spend More Than Congress Provides
        3. Budget and Accounting Act of 1921
        4. Budget and Accounting Procedures Act of 1950: Strengthened Federal Financial Practices
        5. Supplemental Appropriations Act of 1951: Define the Legal Form for Federal Obligations
        6. Impoundment Control Act of 1974: Congressional Budget Office, New Fiscal Year, and More
        7. Inspector General Act of 1978
        8. Federal Managers’ Financial Integrity Act of 1982
        9. Single Audit Act of 1984: One Audit, Once A Year, by One Auditor
        10. Federal Credit Reform Act of 1990: Full Cost of Loans and Loan Guarantees Must Be Budgeted
        11. Chief Financial Officers Act of 1990: Uniform Reporting, Agency CFOS, Annual Financial Statements, Independent Audits
        12. Government Performance and Results Act of 1993, Amended in 2010
        13. Federal Financial Management Improvement Act of 1996
        14. Accountability for Tax Dollars Act of 2002
        15. Improper Payment Information Act of 2002, Amended in 2010 and 2012
        16. Department of Homeland Security Financial Accountability Act of 2004
        17. Federal Funding Accountability and Transparency Act of 2006
      3. Chapter 3: Selected Issues in Federal Financial and Internal Control Reporting
        1. Federal Financial Statements
        2. An Emphasis on Internal Control Over Financial Reporting
        3. Internal Controls: Reporting by Federal Agencies
        4. Assessing Internal Control Over Financial Reporting
        5. OMB Internal Control Deficiencies
        6. Gao’s Government Auditing Standards: No Audit of Internal Controls Over Financial Reporting
        7. Emerging Issues
    7. Part II: Federal Budgeting, Accounting, and Financial Statements
      1. Chapter 4: Accounting in the Federal Government
        1. The Federal Budget Process
        2. Budget Cycle
        3. PPBS, ZBB, and MBO Budget Concepts
        4. Federal Accounting: Process, Definitions, Transactions, Life Cycle
        5. Nature of Congressional Allocations
        6. Nature of An OMB Apportionment
        7. Nature of Federal Entity Allotments
        8. Nature of Federal Allowances
        9. Nature of Federal Obligations
        10. Proprietary Accounting
      2. Chapter 5: Federal Financial Statements
        1. Introduction to Federal Financial Statements
        2. Historical Emphasis of Federal Financial Reporting
        3. Hierarchy of Accounting Principles for Federal Entities
        4. Federal Government’s Accounting Hierarchy
        5. Federal Reporting Entity
        6. Reporting by Departments, Agencies, and the Government as A Whole
        7. Federal Financial Statements
        8. Government-Wide Financial Statements
    8. Part III: Auditing in the Federal Government
      1. Chapter 6: Evolving Guidance
        1. 2006 Standards
        2. Recent Developments in Federal Guidance
      2. Chapter 7: The Federal Audit Model
        1. Audit Checklists and Models
        2. Federal Audit Model
        3. Phases of Federal Audits
        4. Government Auditing Standards: Not Stand-Alone Standards
        5. Management’s Assertions
        6. Audit Tests, Procedures, and Activities
        7. Audit Evidence
        8. Sampling
        9. Materiality
        10. Discreditable Acts
      3. Chapter 8: Planning the Audit
        1. Planning to Fill the Knowledge Gaps
        2. Planning Phase: Do it Early, Do it Continuously
        3. Audit Models, Audit Checklists: No Substitutes for Judgment
        4. Understand the Federal Auditee: Each is Unique
        5. Audit Techniques and Sources of Information: How to Achieve an Understanding of the Agency
        6. Put the Understanding to Use: Develop the Initial Audit Approach
        7. Audit Team Meetings: What Do We Think?
        8. Documenting the Planning Phase: Developing the Account Risk Analysis and the Audit Strategy/Audit Plan
        9. Document the Planning Phase: Gantt Chart the Audit Approach
        10. Specific Control Evaluation Worksheet
        11. Account Risk Analysis Form
      4. Chapter 9: Documenting Internal Controls
        1. Internal Controls, Definitions, and Requirements
        2. Internal Controls, A Historical Perspective
        3. Federal Standard Setters
        4. Selected Federal Guidance
        5. Internal Control Evaluation Requirements
        6. Documenting Internal Controls
        7. Completing and Documenting the Auditor’s Understanding of Internal Controls
      5. Chapter 10: Assessing and Evaluating Control Risks
        1. Assess Control Risks
        2. Assess Account-Level Risk
        3. Develop Auditing Procedures
        4. Finalize and Document the Audit Approach
      6. Chapter 11: Test of Controls, Transactions, and Accounts
        1. Types of Tests
        2. Testing Internal Controls
        3. How to Test Controls
        4. Walk-Throughs and Tests of Control
        5. Tests of Controls are not Effective Tests for Transaction Accuracy
        6. Controls to Test and How
        7. Substantive Tests
        8. Audit Sampling
        9. Sampling Considerations
        10. Information Technology Considerations
        11. Outsourcing Accounting and Data Services
      7. Chapter 12: End-of-Audit, Quality Control, and Reporting Procedures
        1. Obtain Management and Legal Representation Letters
        2. Final Critique of Audit Plan, Programs, and Procedures
        3. Audit Quality Control Review and Validation
        4. Issuing the Independent Auditor’s Reports
        5. Illustrative Independent Auditor’s Report
        6. Illustrative Independent Auditor’s Report on Internal Control and Compliance and Other Matters
        7. Illustrative Independent Auditor’s Report on Special-Purpose Financial Statements
    9. Part IV: Nature of Selected Federal Audits
      1. Chapter 13: Auditing and Evaluating Federal IT Systems
        1. Understanding the Need for it Security
        2. Federal it Audit Process
        3. Understanding Key Laws and Regulations on Information Security
        4. Privacy and the Expanded Requirements in Federal it Audits
        5. Growing Demand for it Audit and Information Assurance Services
        6. Closing Thoughts
      2. Chapter 14: Performance Audits
        1. Performance Auditing: Minimal Guidance, no Safe Harbors
        2. General Standards: Independence, Professional Judgment, Collective Competence, Quality Control And Assurance
        3. Fieldwork Standards: Planning, Supervision, Sufficient and Competent Evidence, Documentation
        4. Reporting Standards: Written Reports, Report Content, Quality Reporting, Report Distribution
        5. Structuring A Performance Audit: Interesting, Challenging, and Not Without Risk
        6. Overview of Performance Audit Process: Plan, Do, Review, Report
        7. Orientation Phase: With Arrangers of Audit and Auditee
        8. Review Risks and Issues: Winnow Down Audit Areas
        9. Conduct the audit: Get the Facts, Findings
        10. Report of Audit: Briefings and Interim and Final Reports
      3. Chapter 15: Procurement Audits, Contract Audits, and Grant Audits
        1. Contract Audits
        2. Federal Procurements
        3. Procurement Audits
        4. OMB’s Compliance Audit Supplement
        5. Audit Issues
        6. Allowable/Unallowable Cost Criteria
        7. Grant Audits
        8. Audits of Grantees
        9. American Recovery and Reinvestment Act
      4. Chapter 16: Attestation Reports
        1. Attest Engagements
    10. Index