ASB interpretation permits auditor reporting on sustainability financial statements

By Ken Tysiac

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

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.

Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.

SPONSORED REPORT

Scorecard preparation templates and tips

With Workiva, we've created a PowerPoint deck that helps you create your own scorecards -- quick reference reports used across organizations to update stakeholders on the performance of defined deliverables.

100th ANNIVERSARY

Black CPA Centennial, 1921–2021

With 2021 marking the 100th anniversary of the first Black licensed CPA in the United States, a yearlong campaign kicked off to recognize the nation’s Black CPAs and encourage greater progress in diversity, inclusion, and equity in the CPA profession.