|
The
objectives of financial reporting for governmental units
are to provide information to enable financial statement
users to assess:
- Government’s duty
to be publicly accountable
- Governmental unit’s
operating results for the period
- Level of services
the governmental unit can provide
Specific
objectives include providing information to determine
whether current year revenues are sufficient to pay for
current year services and whether resources were
obtained and used in accordance with the budget and
other finance-related requirements. Governmental
financial reports tend to emphasize the availability of
liquid resources to pay current liabilities because
governmental units levy taxes to pay for expected levels
of service.
Types
of Audits
Governmental units have
audits of their financial statements for a variety of
reasons. Local or state laws may require an audit of the
governmental unit’s financial statements, a granting
agency providing funds to the governmental unit may
require an audit of the expenditure of those funds, and
lenders or financial intermediaries in a bond issue may
recommend or require an audit of the governmental issuer’s
financial statements.
GAAS
Audit
An audit performed in accordance with the American
Institute of Certified Public Accountants’ (AICPA)
generally accepted auditing standards (GAAS).
Financial
Statement Audit
Financial statement audits
provide reasonable assurance about whether the financial
statements of an audited entity present fairly the
financial position, results of operations, and cash
flows in conformity with generally accepted accounting
principles. Financial statement audits also include
audits of financial statements prepared in conformity
with other comprehensive basis of accounting such as
cash basis, tax basis, regulatory basis, etc., as
discussed in auditing standards issued by the AICPA.
Financial
Related Audit
Financial related audits include
determining whether (1) financial information is
presented in accordance with established or stated
criteria, (2) the entity has adhered to specific
financial compliance requirements, or (3) the entity’s
internal control structure over financial reporting
and/or safeguarding assets is suitably designed and
implemented to achieve the control objectives.
Client
references available upon request.
Click on
the subjects below to learn more about other specific
audits, and related topics:
Click
Here for links of interest to Cities, Townships
& School Districts. |
