Introduction

4.01 This chapter prescribes field work standards and provides guidance for financial audits performed in accordance with generally accepted government auditing standards (GAGAS). Financial audits consist of all work performed under the American Institute of Certified Public Accountants’ (AICPA) generally accepted auditing standards and governed by the AICPA Statements on Auditing Standards (SAS). GAGAS incorporate the AICPA generally accepted field work standards for audits and the related SASs unless the Comptroller General of the United States excludes them by formal announcement. ¹  This chapter identifies the AICPA field work standards and prescribes additional standards for financial audits performed in accordance with GAGAS.

4.02 Financial audits performed in a government environment primarily include audits of financial statements. ²  The SASs also govern and provide guidance for other types of financial audits which may be performed in a government environment, such as

compliance auditing, issuing special reports, ³  audits of service organizations, reviews of interim financial information, and issuing letters to underwriters and certain other requesting parties. These other services may be performed in conjunction with an audit of financial statements.

1To date, the Comptroller General has not excluded any field work standards or SASs.

2The term “financial statements” refers to a presentation of financial data, including accompanying notes, derived from accounting records and intended to communicate an entity’s economic resources or obligations at a point in time or the changes for a period of time in conformity with an identifiable framework, such as generally accepted accounting principles (GAAP) or another comprehensive basis of accounting. Audits of financial statements include all services governed by the AICPA SASs for which the auditors are engaged to provide a level of assurance on the fair presentation of financial statements in accordance with stated criteria.

3The term “special report” applies to auditors’ reports issued in connection with the following: (1) financial statements that are prepared in conformity with a comprehensive basis of accounting other than GAAP; (2) specified elements, accounts, or items of a financial statement; (3) compliance with aspects of contractual agreements or regulatory requirements related to audited financial statements; (4) financial presentations to comply with contractual agreements or regulatory provisions; or (5) financial information presented in prescribed forms or schedules that require a prescribed form of auditors’ report. Under GAGAS, an audit of financial statements prepared in conformity with a comprehensive basis of accounting other than GAAP (item 1 above) would be subject to the same GAGAS requirements applicable to audits of financial statements prepared in conformity with GAAP.