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Public Sector Auditing Standards:What You Need to Know

NationalIntergovernmental

Audit Forum

Jeanette Franzel

November 3, 2011

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Objectives

Gain perspective and understanding of theauditing standards setting scene globally and inthe U.S., and how it relates to Yellow Book.

Become familiar with major initiatives in theauditing standards area.

Promote awareness of trends in accountingstandards and internal control standards thatcould impact government auditors in the U.S.

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A few Acronyms

AICPA, ASB American Institute of Public Accountants, Auditing Standards

Board SAS

Statements on Auditing Standards (issued by AICPA ASB) IFAC

International Federation of Accountants IAASB

International Auditing and Assurance Standards Board ISA

International Standards on Auditing (issued by IAASB) IPSASB

International Public Sector Accounting Standards Board

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A Few More Acronyms

INTOSAI International Organization of Supreme Auditing Institutions

ISSAIs International Standards of Supreme Audit Institutions

COSO Committee of Sponsoring Organizations

IIA Institute of Internal Auditors

IIASB International Internal Auditing Standards Board

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Even More Acronyms

IASB International Accounting Standards Board

IFRS International Financial Reporting Standards (issued by IASB)

GASB Government Accounting Standards Board

FASAB Federal Accounting Standards Advisory Board

FASB Financial Accounting Standards Board

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Yellow Book

The Yellow Book financial audit standards incorporate U.S. auditing standards,

(the SASs, which are issued by the AICPA).

AICPA SASs have been converged with theinternational financial audit standards

(the ISAs which are issued by the IAASB).

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INTOSAI Standards

ISSAIs cover both financial and performance audits

For financial audits, ISSAIs incorporate the ISAs of the IAASB ISSAIs also incorporate Practice Notes which have been

developed by a group of experts from the INTOSAI community

For performance audit standards, the INTOSAI is workingclosely with IIA and GAO

GAO follows Yellow Book Standards, which areconsistent with INTOSAI standards

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INTOSAI Financial Audit GuidelinesStrategy for Development

INTOSAI Strategic Objective for ISSAIs To develop high quality guidelines that are globally accepted for

the audit of financial statements in the public sector.

Strategy To leverage the expertise and resources of the IAASB, an

internationally respected auditing standards setting organization,in a strategic and cooperative partnership.

To leverage the expertise of national audit offices from aroundthe world to assist in the development of the standards andpractice notes.

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Financial Audit Guidelines

International

Standard onAuditing

Practice

Note

+

InternationalStandards of Supreme AuditInstitutions

=

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Practice NotesSpecific Public Sector Considerations

Terminology Broader mandate Accountability to the public Public reporting Inability to withdraw from some engagements Terms of engagement and legal mandate Quality assurance Documentation

Fraud and error Communication Risk Assessment Materiality Reporting

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U.S.Government

Auditing Standards

AICPAs Statementson Auditing Standards

INTOSAIsInternational

Standardsfor SAIs (ISSAIs)

IFACs InternationalStandards on Auditing

BasicAccountingPrinciples

Specific toPublic Sector

Yellow Book and Other Financial Auditing Standards

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Yellow Book and Other PerformanceAudit Standards

IIAs Internal Auditing Standards

INTOSAIs ISSAIs

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Financial Audit GuidelinesStructure for Development

INTOSAI Professional Standards Committee

INCOSAI

INTOSAI Governing Board

SAI Independence

AccountingStandards &Reporting

Internal control

Standards

PerformanceAudit

Compliance

Audit

Financial AuditGuidelines*

Focus Group

Project Director &Project Secretariat

ReferencePanel

Issues Paper

First Read

Exposure Draft

Review of Comments

Final ISA

PSC IAASB

INTOSAI Practice Note

*Led by Swedish National Audit Office. Members include SAIs of Cameroon, Canada, Korea, European Court of Auditors, Mexico, Namibia, Norway, South Africa, United States, United Kingdom

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Update on Other Standards

FASB GASB FASAB IFRS COSO

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Questions?