If you’re studying to become a certified public accountant, an internal auditor, or you’re vying for a spot within your local government – you’re going to need to know a thing or two about government auditing standards. Each year the United States federal government awards billions of dollars in loans, grants, loan guarantees, interest subsidies, and so much more — which are all subject to compliance audit requirements.
From audit reports to financial statements, financial reporting, and internal controls – no matter what types of audits your organization needs to perform, your internal audit team MUST follow accounting standards.
According to the AICPA, financial information from organizations of all kinds and sizes are subject to auditing. Their website states, “Often…audit requirements also require financial statement audits performed under AICPA auditing standards and Government Auditing Standards… Governmental audits also include financial statement audits performed under Government Auditing Standards on entities such as states, local governments, not-for-profit organizations, institutions of higher education, and certain for-profit organizations.”
In short, all financial audits must adhere to AICPA standards, government auditing standards, and generally accepted accounting principles (GAAP). Knowing that the audit process has a lot of gatekeepers for approval should give you a clue that your audit results have to be spot-on; if the IRS feels the need to take corrective action to you – an individual – or your organization based on suspicious audit evidence, you’re likely to have to get another audit team (typically external auditors) to come and redo your organization’s audit, and/or pay some fees (or fines).
The future of government auditing includes Yellowbook changes, adjustments to standards boards from the AICPA, which will undoubtedly reflect the future of generally accepted accounting principles.
Are you going for a career as a certified internal auditor? Do you cover any government auditing principles and practices in your fieldwork?
Let us know in the comments!