Wait Continues for OMB Response to SAS 112 Changes
May 2, 2007
The Office of Management and Budget (OMB) has been working on a rulemaking that will instruct agencies and auditors to begin using internal control terminology consistent with SAS 112 for audits under A-133. A notice is expected to be issued later in May that could involve a public comment period. NACUBO will alert members concerning both the OMB announcement and an expected AICPA Interpretation regarding Circular A-133 audits.
• As a result of the Sarbanes-Oxley Act of 2002, the Public Company Accounting Oversight Board (PCAOB) was formed and issues financial auditing standards for publicly traded companies. PCAOB Audit Standard No. 2 (AS 2) introduced new audit terminology. AS 2 has set into motion a series of events in the audit industry.
• In the spring of 2006, the AICPA issued Statement on Auditing Standards (SAS) No. 112, Communicating Internal Control Related Matters Identified in an Audit–which is effective for FY07 audits for the vast majority of higher education institutions. SAS 112 introduced new audit terminology (control deficiency, significant deficiency, and material weakness) used in AS 2, and requires that the auditor communicate in writing to management and those in charge of governance the control deficiencies that are significant deficiencies or material weaknesses in internal control.
• In February 2007, the Government Accountability Office (GAO) issued the 2007 revision of the Government Auditing Standards (commonly known as the Yellow Book)–making the effective dates of all new AICPA standards applicable to financial statement audits performed under Generally Accepted Government Auditing Standards (GAGAS). This means that the GAO requires the auditor to use SAS 112 in the auditors Report on Compliance and Internal Control Over Financial Reporting when SAS 112 becomes effective.
• In the fall of 2006, the Single Audit Coordinating Committee of the AICPA began addressing the use of the new SAS 112 terminology when reporting internal control over compliance in an Office of Management and Budget (OMB) Circular A-133 audit.
• In early 2007, the Single Audit Coordinating Committee recommendations were addressed by the Auditing Standards Board (ASB) of the AICPA with the objective of cohesive audit guidance.
• The AICPA is awaiting an official notification from OMB concerning the use of SAS 112 terminology. The AICPA will synchronize the issuance of an Interpretation that defines the terms control deficiency, significant deficiency, and material weakness from the perspective of OMB Circular A-133.
• The AICPA Governmental Audit Quality Center will issue illustrative Circular A-133 auditor reports that reflect the new terminology.
- Federal Court Postpones Effective Date of Overtime Rule
- 1098-T Box 1 Reporting Will Not be Required Until 2018 Tax Year
- EPA Issues Hazardous Waste Generator Improvements Rule
- 2017 Intermediate Accounting and Reporting - Winter
January 23-24, 2017
- 2017 Endowment and Debt Management Forum
February 1-3, 2017
- ON-DEMAND: The CBO's Role in Diversity and Inclusion on Campus
- ON-DEMAND: The Clery Act: Strategic Planning to Mitigate Institutional Risk
- ON-DEMAND: Title IX: Key Issues Surrounding Institutional Compliance
- ON-DEMAND: NACUBO Live! Higher Education Accounting Forum
- ON-DEMAND: Responsibility Center Management: Two Different Perspectives