Government Audits


Objectives of financial reporting for governmental units are to provide information to enable financial statement users to assess the following items:

Types of Audits

There are several different types of audits for government agencies. The type of audit required depends on several factors. These factors include: the level of federal funding; granting agency requirements; state or local statutes; lenders or bond issue requirements.

GAAS Audit
This is an audit performed in accordance with the American Institute of Certified Public Accountants (AICPA) Generally Accepted Auditing Standards (GAAS).

Financial Audit
The financial audit, as described by the Comptroller General of the United States is often referred as a ‘yellow book audit’. (This is due to the fact that the audit guide, printed by the U.S. General Accounting Office, is yellow.)Financial audits include determining whether:

  • financial information is presented in accordance with established or standard custom
  • the entity has adhered to specific financial compliance requirements
  • the internal control standard over financial reporting and/or safeguarding assets is suitably designed and implemented to achieve the control objectives

This is the most common type of audit for smaller government and nonprofit agencies. For more information about this type of audit, click here

Single Audit
A single audit refers to the Single Audit Act and OMB Circular A-133. The purpose of this act is to reduce the number of individual program acts by requiring one single audit to cover all programs or grants of the agency. An agency is required to obtain a single audit if it expends over $300,000.00 in federal funds in the fiscal year. The single audit requires the auditor to express an opinion on the following items:

  • that the financial statements are fairly presented in conformity with Generally Accepted Accounting Principles (GAAP)
  • that the auditee has complied with laws, regulations and provisions of contracts which could have a direct and natural effect on each major program