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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.
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