Federal Report on Single Audit Quality Study Released 

A federal study on the quality of audits performed under Office of Management and Budget (OMB) Circular A-133, Audits of States, Local Governments and Non-Profit Organizations (http://www.whitehouse.gov/omb/circulars/a133/a133.pdf), was issued June 22. The report, titled Report on National Single Audit Sampling Project (the PCIE report), was issued by the President’s Council on Integrity and Efficiency (PCIE) and addressed to the OMB.  It can be accessed in its entirety by going to http://www.ignet.gov/pande/audit/NatSamProjRptFINAL2.pdf.

Overall, the study undertaken by a group of federal agency Offices of Inspector General and three state auditor’s offices in 2002 had two goals:

1. Determine the quality of single audits and establish a statistically based measure of audit quality, and
2. Recommend changes in single audit requirements, standards and procedures to improve the quality of single audits.

The scope of the study did not include a review of the content of, or the audit work performed, related to the general-purpose financial statements, the auditor’s opinion on those statements or the auditors’ review of internal control over financial reporting. 

The 208 audits reviewed were randomly selected from approximately 38,000 audits that were generally conducted during the 2002-2003 timeframe. The report on the review of the 208 audits shows that improvements are needed in many areas.

The Tennessee Society of CPAs and the American Institute of Certified Public Accountants (AICPA) take the results and the recommendations of the PCIE report very seriously and share the commitment of the federal agencies involved in the Project to improve the quality of single audits.  Because many of the audits that were reviewed were performed four to five years ago, the AICPA is confident that many of the Institute’s endeavors over the last several years (for example, the launch of the Governmental Audit Quality Center (GAQC) in 2004) have already begun to address some of the issues raised in the PCIE report.

The GAQC will form a special task force to study in detail the PCIE report findings and recommendations and to work with the OMB, the Inspector Generals and other interested parties in order to provide additional guidance to help members achieve the highest standards in performing quality governmental audits.