[barelystayingsane]

Hello,

I just need a little clarification on the differences between reporting on internal control for regular audits and governmental audits. My understanding is that in the actual report on internal control for an integrated audit (not the written communication to management and governance), you would only report on material weaknesses, not significant deficiencies. But in a governmental audit report, you would also indicate that significant deficiencies (as well as any material weaknesses) were found. Is that correct?

Thank you!

[barelystayingsane]

Did a little research and that does seem to be correct. For anyone interested, the AICPA has a couple different examples of reports showing differences between when significant deficiencies and/or material weaknesses are identified and when they're not. Here's the link: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CDoQFjAC&url=http%3A%2F%2Fwww.aicpa.org%2Finterestareas%2Fgovernmentalauditquality%2Fresources%2Fillustrativeauditorsreports%2Fdownloadabledocuments%2Fgasillustrativeauditorreportsch4appxaupdatedforclarity.doc&ei=dNQuUqa9E6bUyQHXt4GwCA&usg=AFQjCNFnn8OVFfCOEl8cPc0918EBRIAEYQ&sig2=lcq33srCjLGq-Qa7xtlwhQ&bvm=bv.51773540,d.aWc

Here are also a couple fact nuggets about governmental auditing that I struggled to understand but now have down. Hopefully, they might save somebody else the time, as well:

– You are only required to express an opinion on compliance under OMB Circular A-133 (not under normal GAGAS). So if you're just operating under GAGAS, there's no need to obtain reasonable assurance regarding compliance unless you've also been hired for a compliance audit.

– You do not provide either positive or negative assurance on internal controls in the report accompanying the FS audit (although you can gather enough evidence to provide an opinion).

– For reports on internal controls, you should indicate BOTH significant deficiencies and material weaknesses (only material weaknesses are required for regular GAAS/PCAOB audits).

[barelystayingsane]

Did a little research and that does seem to be correct. For anyone interested, the AICPA has a couple different examples of reports showing differences between when significant deficiencies and/or material weaknesses are identified and when they're not. Here's the link: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CDoQFjAC&url=http%3A%2F%2Fwww.aicpa.org%2Finterestareas%2Fgovernmentalauditquality%2Fresources%2Fillustrativeauditorsreports%2Fdownloadabledocuments%2Fgasillustrativeauditorreportsch4appxaupdatedforclarity.doc&ei=dNQuUqa9E6bUyQHXt4GwCA&usg=AFQjCNFnn8OVFfCOEl8cPc0918EBRIAEYQ&sig2=lcq33srCjLGq-Qa7xtlwhQ&bvm=bv.51773540,d.aWc

Here are also a couple fact nuggets about governmental auditing that I struggled to understand but now have down. Hopefully, they might save somebody else the time, as well:

– You are only required to express an opinion on compliance under OMB Circular A-133 (not under normal GAGAS). So if you're just operating under GAGAS, there's no need to obtain reasonable assurance regarding compliance unless you've also been hired for a compliance audit.

– You do not provide either positive or negative assurance on internal controls in the report accompanying the FS audit (although you can gather enough evidence to provide an opinion).

– For reports on internal controls, you should indicate BOTH significant deficiencies and material weaknesses (only material weaknesses are required for regular GAAS/PCAOB audits).

[Author]

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