New auditing interpretation issued

The ASB is permitting auditor reporting on sustainability financial statements.

The AICPA Auditing Standards Board (ASB) issued an auditing interpretation that permits an auditor to report on the basic financial statements of the U.S. government in accordance with GAAS.

The interpretation relates to a new standard issued by the Federal Accounting Standards Advisory Board (FASAB) that requires that the statement of long-term fiscal projections be presented in the consolidated financial report of the U.S. government as a basic financial statement starting in fiscal year 2015.

FASAB's Statement of Federal Financial Accounting Standards No. 36, Reporting Comprehensive Long-Term Fiscal Projections for the U.S. Government, as amended, focuses on forward-looking information to help users assess whether future resources are likely to be sufficient to sustain public services and meet obligations as they become due.

The ASB interpretation allows an auditor to report on the U.S. government's basic financial statements, which include the statements of social insurance, changes in social insurance amounts, and long-term fiscal projections. For purposes of the interpretation, the statement of long-term projections, the statement of social insurance, and the statement of changes in social insurance amounts are referred to as "sustainability financial statements."

Interpretation No. 2, "Sustainability Financial Statements Under Federal Financial Accounting Standards—Auditor Reporting," of AU-C Section 700, Forming an Opinion and Reporting on Financial Statements, also provides an illustrative auditor's report containing an unmodified opinion on the U.S. governmentwide financial statements.

SPONSORED REPORT

The technology assessment engagement

Are you working with the best technology? Do you know how to help your clients determine if their technology stack measures up? In this free report, J. Carlton Collins, CPA, explains how to answer those questions via a technology assessment engagement.

FEATURE

Maximizing the higher education tax credits

A counterintuitive strategy can save taxes by including otherwise excludable scholarships in gross income.