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Financial Audit Manual Update

AGA, DC Chapter Conference May 7, 2008

Roger Stoltz, GAO & Alex Biggs, DOL, OIG

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Sources of FAM Changes• Auditing & attestation standards (GAAS)• Yellow Book (GAGAS)• OMB audit and reporting guidance• FASAB accounting standards• Laws and regulations• Peer reviews and inspections • Issues from auditors doing work

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Activities Affecting the FAM• SAS #100-114 (December 2006)• Yellow Book (January & July 2007)• OMB Circulars A-123 & A-136 & Bulletin 07-04

(2007)• FASAB Standards through May 2007 (SFFAS

#32)• Laws and Regulations (Antideficiency reporting)• Peer Reviews & Inspections (IS & audit work)• Various Issues from Audit Work

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SAS #104-111 Audit Risk Standards

• Effective for FY 2008 audits• Risk of material misstatement• Design and performance of audit procedures• Planning and supervision• Audit evidence• Terminology• Affects FAM 100-500 Methodology (Volume 1)

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FAM 100 Overview•Must•Should•Generally should•May

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FAM 215 Client Understanding

• New FAM 215, 215 A, 215 B• Who is the client?• Those charged with governance• Communication• Engagement letters

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Other FAM Planning Changes

• FAM 235 Identify Audit Assertions• FAM 260 Identifying Risk Factors• FAM 285 Plan Locations to Visit• FAM 290 Documentation• FAM 295 B Material Misstatements

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FAM Internal Control Changes

• FAM 310 Overview• FAM 320 Information Systems• FAM 350 Control Tests & FFMIA• FAM 380 Other Considerations• FAM 390 Documentation

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FAM Testing Changes

• FAM 410 Overview• FAM 420 Design Audit Procedures• FAM 450 Sampling Control Tests• FAM 470 Substantive Procedures• FAM 475 Analytical Procedures• FAM 490 Documentation

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FAM Reporting Changes

• FAM 540 Evaluating Misstatements• FAM 550 Other Audit Procedures• FAM 580 Draft Reports• FAM 590 Documentation• FAM 595A Example Unqualified Report• FAN 595B Example Modifications• FAM 595C Uncorrected Misstatements

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FAM Volume 2 Changes

• Effects of Professional Standards• FAM 650 Using the Work of Others• FAM 701 Compliance with FFMIA• FAM 802 General Compliance• FAM 803 Antideficiency Act

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More FAM Volume 2 Changes

• FAM 902 Auditing Intragovernmental• FAM 903 Auditing Cost Information• FAM 921 Auditing FBWT• FAM 931 Auditing Heritage Assets• FAM 941 Auditing Social Insurance

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FAM Volume 2 Reporting Changes

• FAM 1001 Management Representations

• FAM 1001A Example Mgt Rep Letter

• FAM 1002 Inquiries of Legal Counsel

• FAM 1003 Audit Completion Checklist

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Issue Revised FAM• FAM volumes are issued electronically• IG NET messages to Inspector Generals and others• Posted on GAO and PCIE web sites• Joint transmittal letter with attachment highlighting key

changes by FAM section• WORD/ACROBAT files by FAM section• Printed copies can be made• FAM Volume 3 was issued August 28, 2007• FAM Volumes 1 & 2 to be issued in May 2008

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Contacts & CommentsContacts:• GAO -- Call Roger Stoltz at (202) 512-9408 or e-mail at

stoltzr@gao.gov • GAO -- Call Janet Krell at (202) 512-4716 or e-mail at

krellj@gao.gov • PCIE – Call Alex Biggs at (202) 693-5258 or e-mail at

Biggs.Alex@oig.dol.gov• PCIE – Call Joel Grover at (202) 927-5768 or e-mail at

GroverJ@oig.treas.gov

Any comments or questions?