Financial Audit Manual Update

1
Financial Audit Manual Update

• AGA, DC Chapter Conference
• May 7, 2008
• Roger Stoltz, GAO Alex Biggs, DOL, OIG

2
Sources of FAM Changes

• Auditing attestation standards (GAAS)
• Yellow Book (GAGAS)
• OMB audit and reporting guidance
• FASAB accounting standards
• Laws and regulations
• Peer reviews and inspections
• Issues from auditors doing work

3
Activities Affecting the FAM

• SAS 100-114 (December 2006)
• Yellow Book (January July 2007)
• OMB Circulars A-123 A-136 Bulletin 07-04
  (2007)
• FASAB Standards through May 2007 (SFFAS 32)
• Laws and Regulations (Antideficiency reporting)
• Peer Reviews Inspections (IS audit work)
• Various Issues from Audit Work

4
SAS 104-111 Audit Risk Standards

• Effective for FY 2008 audits
• Risk of material misstatement
• Design and performance of audit procedures
• Planning and supervision
• Audit evidence
• Terminology
• Affects FAM 100-500 Methodology (Volume 1)

5
FAM 100 Overview

• Must
• Should
• Generally should
• May

6
FAM 215 Client Understanding

• New FAM 215, 215 A, 215 B
• Who is the client?
• Those charged with governance
• Communication
• Engagement letters

7
Other FAM Planning Changes

• FAM 235 Identify Audit Assertions
• FAM 260 Identifying Risk Factors
• FAM 285 Plan Locations to Visit
• FAM 290 Documentation
• FAM 295 B Material Misstatements

8
FAM Internal Control Changes

• FAM 310 Overview
• FAM 320 Information Systems
• FAM 350 Control Tests FFMIA
• FAM 380 Other Considerations
• FAM 390 Documentation

9
FAM Testing Changes

• FAM 410 Overview
• FAM 420 Design Audit Procedures
• FAM 450 Sampling Control Tests
• FAM 470 Substantive Procedures
• FAM 475 Analytical Procedures
• FAM 490 Documentation

10
FAM Reporting Changes

• FAM 540 Evaluating Misstatements
• FAM 550 Other Audit Procedures
• FAM 580 Draft Reports
• FAM 590 Documentation
• FAM 595A Example Unqualified Report
• FAN 595B Example Modifications
• FAM 595C Uncorrected Misstatements

11
FAM Volume 2 Changes

• Effects of Professional Standards
• FAM 650 Using the Work of Others
• FAM 701 Compliance with FFMIA
• FAM 802 General Compliance
• FAM 803 Antideficiency Act

12
More FAM Volume 2 Changes

• FAM 902 Auditing Intragovernmental
• FAM 903 Auditing Cost Information
• FAM 921 Auditing FBWT
• FAM 931 Auditing Heritage Assets
• FAM 941 Auditing Social Insurance

13
FAM Volume 2 Reporting Changes

• FAM 1001 Management Representations
• FAM 1001A Example Mgt Rep Letter
• FAM 1002 Inquiries of Legal Counsel
• FAM 1003 Audit Completion Checklist

14
Issue Revised FAM

• FAM volumes are issued electronically
• IG NET messages to Inspector Generals and others
• Posted on GAO and PCIE web sites
• Joint transmittal letter with attachment
  highlighting key changes by FAM section
• WORD/ACROBAT files by FAM section
• Printed copies can be made
• FAM Volume 3 was issued August 28, 2007
• FAM Volumes 1 2 to be issued in May 2008

15
Contacts Comments

• Contacts
• GAO -- Call Roger Stoltz at [phone] or
  e-mail at stoltzr_at_gao.gov
• GAO -- Call Janet Krell at [phone] or
  e-mail at krellj_at_gao.gov
• PCIE Call Alex Biggs at [phone] or
  e-mail at Biggs.Alex_at_oig.dol.gov
• PCIE Call Joel Grover at [phone] or
  e-mail at GroverJ_at_oig.treas.gov
• Any comments or questions?