Are You Complying With These Frequently Violated Professional Standards?
Source: CPA Success
The following includes excerpts, reproduced with permission, from a blog entry by Bill Sheridan.
The AICPA's Professional Ethics Division has released lists of the most frequent violations it has documented during audit investigations over the past two years. The lists focus primarily on government/not-for-profit investigations and those centering on employee benefit plans. Here's the scoop:
Most frequent government/NFP violations
Single-audit issues:
- Failure to accurately identify and test all major programs
- Incorrect dollar threshold used
- Improper risk assessment
- Missing information in the SEFA
Auditor's reporting:
- Improper audit report date
- Character of examination and degree of responsibility
- Summarized information
- SAS No. 115
- Opinion units and departures not specified
- Omitted required opinion and report wording
Audit procedures:
- Allocation of indirect expenses
- Failure to obtain sufficient competent evidential matter
- Inadequate documentation
- Failure to utilize or customize an audit program
Financial statement deficiencies related to:
- Reporting expenses
- Donated services
- Failure to disclose the nature and amount of donor-imposed restrictions
- Fair-value disclosure
- Management discussion and analysis
- Improperly classified revenues
- Unreserved fund balance
- Interfund balances
- Disclosure of prior-period adjustments
- Disclosure concerning liabilities and debt service
- Subsequent events
Other:
- Failure to comply with CPE requirements
Most frequent employee benefit plan violations
Auditor's reporting:
- Improper audit report date
- Character of examination and degree of responsibility
- Improper certification
Audit procedures:
- Failure to obtain sufficient competent evidential matter
- SAS 70 reports
- Inadequate documentation
- Failure to utilize or customize an audit program
Financial statement deficiencies related to:
- Benefit responsive contracts
- Fair-value disclosure
- Accumulated plan benefits
- Other financial statement deficiencies
For the complete blog entry, read “Heads Up: Most Frequently Violated Professional Standards.”
From CPA Success, the blog of the Maryland Association of CPAs, March 26, 2013, http://www.cpasuccess.com.