Considering the Results of Previous Audits and Attestation Engagements

GAO-03-673G Government Auditing Standards > Chapter 4 Field Work Standards for Financial Audits > Considering the Results of Previous Audits and Attestation Engagements

4.14 The standard related to considering the results of previous audits and attestation engagements for financial audits performed in accordance with GAGAS is:

Auditors should consider the results of previous audits and attestation engagements and follow up on known significant findings and recommendations that directly relate to the objectives of the audit being undertaken.

4.15 Auditors should ask audited entity officials to identify previous financial audits, attestation engagements, performance audits, or other studies related to the objectives of the audit being undertaken and to identify corrective actions taken to address significant findings and recommendations,¹including those related to reportable conditions. For example, an audit report on an entity’s computerized information systems may contain significant findings that could relate to the financial audit if the entity uses such systems to process its accounting information. Auditors should use professional judgment in determining
(1) prior periods to be considered, (2) the level of work necessary to follow up on significant findings and recommendations that affect the audit, and (3) the effect on the risk assessment and audit procedures in planning the current audit.

4.16 Providing continuing attention to significant findings and recommendations is important to ensure that the benefits of the auditors’ work are realized. Ultimately, the benefits of audit work occur when management of the audited entity takes meaningful and effective corrective action in response to the auditors’ findings and recommendations. Management of the audited entity is responsible for resolving audit findings and recommendations directed to them and for having a process to track their status. If management of the audited entity does not have such a process, auditors may wish to establish their own process.

1Significant findings and recommendations are those matters that, if not corrected, could affect the results of the auditors’ work and the auditors’ conclusions and recommendations about those results.