Page 180 - DCOM509_ADVANCED_AUDITING

Unit 10: Government and Independent Financial Audit: Comparison

10.3 Government Auditing Standards Notes

Auditing is essential to government accountability to the public. Audits and attestation
engagements provide an independent, objective, non-partisan assessment of the stewardship,
performance, or cost of government policies, programs, or operations, depending upon the type
and scope of the audit. For financial audits, certain standards of the Auditing Standards Board
(ASB) that affect Government Auditing Standards become effective prior to these dates.

10.3.1 Use and Application of GAGAS

The professional standards and guidance contained in this document, commonly referred to as
Generally Accepted Government Auditing Standards (GAGAS), provide a framework for
conducting high quality government audits and attestation engagements with competence,
integrity, objectivity, and independence. These standards are for use by auditors of government
entities and entities that receive government awards and audit organizations performing GAGAS
audits and attestation engagements. GAGAS contain requirements and guidance dealing with
ethics, independence, auditors’ professional competence and judgment, quality control, the
performance of field work, and reporting. Audits and attestation engagements performed under
GAGAS provide information used for oversight, accountability, and improvements of
government programs and operations. GAGAS contain requirements and guidance to assist
auditors in objectively acquiring and evaluating sufficient, appropriate evidence and reporting
the results. When auditors perform their work in this manner and comply with GAGAS in
reporting the results, their work can lead to improved government management, better decision
making and oversight, effective and efficient operations, and accountability for resources and
results.

Laws, regulations, contracts, grant agreements, or policies frequently require audits in accordance
with GAGAS. Many auditors and audit organizations also voluntarily choose to perform their
work in accordance with GAGAS. The requirements and guidance in this document apply to
audits and attestation engagements of government entities, programs, activities, and functions,
and of government assistance administered by contractors, non-profit entities, and other
nongovernmental entities when the use of GAGAS is required or is voluntarily followed.

Did u know? GAGAS use two categories of professional requirements, identified by specific
terms, to describe the degree of responsibility they impose on auditors and audit
organizations, as follows:

(a) Unconditional requirements: Auditors and audit organizations are required to
comply with an unconditional requirement in all cases in which the circumstances
exist to which the unconditional requirement applies. GAGAS use the
words must or is required to specify an unconditional requirement.
(b) Presumptively mandatory requirements: Auditors and audit organizations are also
required to comply with a presumptively mandatory requirement in all cases in
which the circumstances exist to which the presumptively mandatory requirement
applies; however, in rare circumstances, auditors and audit organizations may depart
from a presumptively mandatory requirement provided they document their
justification for the departure and how the alternative procedures performed in the
circumstances were sufficient to achieve the objectives of the presumptively
mandatory requirement. GAGAS use the word should to specify a presumptively
mandatory requirement.

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