|Dear Center Members:
|This GAQC Alert provides the following important information for our members:
- A new article on contract issues for governmental audits intended to help you learn about problematic clauses that may cause independence concerns which was developed jointly by the AICPA State and Local Government Expert Panel (SLGEP) and the Government Finance Officers Association (GFOA);
- A reminder of a GAQC practice aid, Procuring Government Audit Services, which provides useful information in navigating through the various steps involved in the procurement of audit services; and
- A "mark your calendar" reminder for the GAQC annual required Webcast.
|Audit Contract Article
The SLGEP meets periodically with the GFOA Committee on Accounting, Auditing and Financial Reporting to discuss topics of mutual interest. Recently, the SLGEP and GFOA worked together to develop a joint article, Contract Issues for Governmental Audits, intended to educate both governments and their auditors about clauses in contracts and engagement letters in the governmental environment that may not meet AICPA professional standards and that may create uncertainty about the auditor's independence.
The article, which is being posted to both the GAQC and GFOA Web sites, addresses the following types of contractual provisions:
The article also provides a series of recommendations for governments when contracting for audit services and concludes that collaborative discussions between the CPA firm and the government are generally needed to ensure that standard government contract terms are reviewed and revised, if necessary, to fit the nature of audit services and meet the needs of all parties.
- Intellectual Property & Ownership of Records
- Approvals of Work Products or Staffing
We encourage GAQC members to read the article, which has been posted to the GAQC Auditee Resource Center, and consider its guidance when negotiating new contracts and engagement letters with clients. Taking this action will help ensure that the contract terms appropriately reflect the nature of the services, protect the interests of the government, and do not cause threats to CPA firm independence under professional standards.
Procuring Government Audit Services Practice Aid
As a reminder, the GAQC previously issued a practice aid through the GAQC Auditee Resource Center titled, Procuring Government Audit Services, which is intended for the various stakeholders involved in the governmental audit procurement process. It provides useful information in navigating through the various steps involved in the procurement of audit services and covers steps including planning the procurement, developing the Request for Proposal, evaluating proposals received, and monitoring the audit.
We encourage you to share this practice aid with both prospective and current clients as the document emphasizes the importance of quality governmental audits and the value of such audits to purchasers of governmental audit services. Like the audit contract article discussed in the section above, appropriate consideration of the audit procurement and contract process is a key aspect of promoting audit quality.
GAQC Annual Required Webcast Coming Soon
The 2019 required Webcast, GAQC Annual Update, will be held on Tuesday, April 30, 2019, from 1:00 PM – 3:00 PM (Eastern Time). We encourage firm and state audit organization (SAO) participation in the live event if possible. This Webcast will provide participants with a summary of the key issues that should be considered by audit teams as part of planning for the 2019 audit season. As a reminder, the GAQC membership requirements state that the firm's designated audit quality partner or SAO designated audit quality leader must attend this annual Center-sponsored Webcast. However, all levels of staff will benefit from attending. Mark your calendars now and watch for future registration information.
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AICPA Governmental Audit Quality Center
|In This Alert
|Yellow Book Independence Event Available
|The archive of the GAQC Web event, Understanding the Changes to Yellow Book Independence, is now available. Access the archived event. Due to its popularity, we will also rebroadcast the event for CPE in the coming months. Watch for a future GAQC Alert.
|We welcome any suggestions or questions - please send them by e-mail at GAQC@aicpa.org.
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