Sneak Preview: New Guidance Calls for Audit Quality Study in 2018

August 13, 2014 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from an article in the Single Audit Information Service.) Audit organizations should be aware that the quality of their single audits will be under federal scrutiny in four years under a provision in the Office of Management and Budget’s uniform grant guidance calling for a governmentwide audit quality review every six years. This is the first time the federal government has established a set schedule for reviewing single audit quality.

In §200.513, the guidance states that a federal agency designated by OMB will lead a governmentwide project to determine the quality of single audits by providing a “statistically reliable estimate of the extent that single audits conform to applicable requirements, standards, and procedures.” The agency will make recommendations to address any audit quality issues, which could include changes to applicable audit requirements, standards and procedures. This governmentwide audit quality project will be conducted every six years beginning in 2018, and the results must be public.

The governmentwide study will evaluate whether auditors are addressing single audit deficiencies identified most recently in an audit sampling project released in 2007 by the President’s Council on Integrity and Efficiency and the Executive Council on Integrity and Efficiency (now known as the Council of the Inspectors General on Integrity and Efficiency). The 2007 study found that more than a third of the 208 audits reviewed were unacceptable. The councils determined that 115, or 48.6 percent, of the single audits reviewed were acceptable and could be relied upon; 30 audits, or 16 percent, were of limited reliability; and 63 audits, or 35.5 percent, were unacceptable and could not be relied upon.

Some of the most prevalent deficiencies found in the 2007 study were the failure to audit a program as a major program, errors in the Schedule of Finding and Questions Cost, and missing documentation related to a finding. A recommendation in that study to revise and improve single audit standards, criteria and guidance helped spur the changes to the audit process now contained in the uniform guidance.



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