Governmental Audits
 

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 Here for links of interest for Cities, Townships, Villages, and School Districts.

Audits
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