Auditing


The GAO issues final standards on auditor independence ( www.gao.gov/special.pubs/agagas3.pdf ). They contain significant changes affecting audits of governments and non- and for-profit entities that participate in federal programs. Among the new rules’ provisions are restrictions on auditing firms’ ability to offer consulting services to their audit clients.

The AICPA is negotiating with the GAO to mitigate negative effects the rules may have on accounting firms and small entities subject to government accounting standards (the yellow book). The Institute encourages practitioners to send their implementation issues and questions via e-mail to GAOIndependence@aicpa.org . The standards are effective for reporting periods beginning after September 30, 2002. ( http://ftp.aicpa.org/public/download/members/div/ethics/INDEPENDENCE_FINAL.doc ; http://ftp.aicpa.org/public/download/members/div/ethics/GAO_AICPA_Comparison.pdf ; http://ftp.aicpa.org/public/download/members/div/ethics/Fact_Sheet_Final.doc ; www.aicpa.org/info/020802memo.htm )

Separately, the GAO issues an exposure draft that proposes revisions throughout all yellow book government auditing standards except the above-discussed second standard—independence ( www.gao.gov/govaud/yb2002ed.htm ). Besides modifying the GAGAS framework, the proposed revisions would strengthen and streamline standards that apply to audits, while encouraging their consistent application. For clarity, the ED discusses financial audits, attestation engagements and performance audits individually. Comments are due by April 30.

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