Interesting Clauses from the 2017 GAGAS Exposure Draft

Hey Audit Nerds –

Stop reading right now if you are NOT an audit nerd!  Specifically a GOVERNMENT audit nerd.

I made this list of interesting clauses from the 2017 Exposure Draft to use in my seminars and I thought I would share it with you.  As you know, the Yellow Book will not be finalized until later this year and many of these clauses could change. That is why only nerds need care at this point:

a)    3.54 – categories of structural threats

b)   3.80 – specific mention of fraud investigations

c)    3.85 – government auditors may need to be transparent about not being independent

d)   3.93 – firm prohibitive language regarding internal control monitoring on behalf of management

e)    4.10-  clarifying roles on an audit

f)     4.15-4.18 – 4 hour GAGAS qualification training

g)    5.09 – annual certification of independence

h)   5.21, 5.33-5.34  – review vs. supervision

i)     5.52 – expanded instructions for annual quality control monitoring

j)     5.62 – detail on contents of monitoring report

k)    5.64 – reference to other audit organization’s peer review standards

l)     5.82-5.83 – time period of peer review

m)  5.84 – written agreement regarding peer review

n)   5.103 – more detail in peer review report

o)    6.16 & 6.17 – waste as another reportable condition

p)   6.27 & 8.123 – internal controls as the root cause of findings

q)   8.37 – internal control work necessary on all performance audits?

You can find the 2017 Exposure Draft here:  http://www.gao.gov/assets/690/683933.pdf