GASB 34 Modified Approach

1
GASB 34 Modified Approach RSI Auditor
Perspective

• Gerry C. Boaz
• Tennessee Division of State Audit
• April 25, 2001

2
Modified Approach

• Asset-Management System
• Documentation Requirements
• Expenditures
• Transition Requirements
• Required Supplementary Information (RSI)
• Required note disclosures to RSI

3
Auditor Considerations Modified Approach

• Asset management systems used by management have
  the required characteristics
• Eligible infrastructure assets are properly
  recorded
• Capitalized amounts represent only original cost
  plus additions or improvements
• No accumulated depreciation was recorded for
  those assets

4
Auditor Considerations Modified Approach

• Major classes of capital assets are separately
  identified
• Detailed capital asset records are (or are not)
  available
• Condition assessment requirements have been met
• Condition assessments are replicable

5
Auditor Considerations Modified Approach

• Contractors or specialists are used to perform
  condition assessments
• RSI, including MDA and Notes to RSI, includes
  required information

6
Auditor Responsibility for RSI

• Inquire about methods of preparing RSI
• Compare information for consistency
• Consider written representations
• Apply additional procedures
• Make additional inquiries
• Disclaim opinion in auditor-submitted documents
• Say nothing or disclaim opinion in
  client-prepared documents

7
Auditor RSI Reporting

• Explanatory paragraph could be added to the
  opinion letter under the following circumstances
• Omission of RSI
• Material departures from GAAP
• Auditor procedures not completed
• Auditors unresolved doubts about presentation

8
Words of Advice

• Start preparing now!
• Create an implementation plan
• Work with your auditors early and often
• Start preparing now!