[Federal Register Volume 63, Number 153 (Monday, August 10, 1998)]
[Notices]
[Page 42636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-21359]


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GENERAL ACCOUNTING OFFICE

[GAO/GAGAS-ED-2]


Government Auditing Standards: Auditor Communication

AGENCY: General Accounting Office.

ACTION: Notice of availability of documents.

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SUMMARY: The U.S. General Accounting Office (GAO), on the 
recommendation of the Advisory Council on Government Auditing 
Standards, has issued an exposure draft of a proposed revision to 
Government Auditing Standards (GAGAS) titled Government Auditing 
Standards: Auditor Communication, (GAO/GAGAS-ED-2) and is seeking 
public comment. The proposed revision would (1) add a new field work 
standard for financial statement audits on auditor communication and, 
(2) revise the reporting standard for reporting on compliance with laws 
and regulations and on internal control over financial reporting. The 
revision will be effective for financial audits of periods ending on or 
after September 15, 1999.

DATES: Comments are accepted through September 30, 1998.

ADDRESSES: A copy of the exposure draft can be obtained on the Internet 
on GAO's Home Page (www.gao.gov) in the Special Publications section. 
Additional copies of these proposed standards can be obtained from the 
U.S. General Accounting Office, Room 1100, 700 4th Street, NW., 
Washington, DC 20548, by calling 202-512-6000, or via FAX 202-512-6061. 
Comments should be both in writing and on diskette (in ASCII format), 
addressed to Robert W. Gramling, Director, Corporate Audits and 
Standards, Accounting and Information Management Division, U.S. General 
Accounting Office, 441 G Street NW., Room 5089, Washington, DC 20548.

FOR FURTHER INFORMATION CONTACT: Robert W. Gramling, 202-512-9406.

SUPPLEMENTARY INFORMATION: In February 1997, the Advisory Council on 
Government Auditing Standards endorsed a revised approach of issuing 
individual standards issue-by-issue as the Council reaches consensus on 
a particular issue, with periodic codification of the standards. This 
revised approach was adopted to provide more timely revision of the 
standards for emerging audit issues. However, the practice of seeking 
public comments on all draft revisions will continue under the new 
approach.
    The American Institute of Certified Public Accountants (AICPA), in 
issuing Statements on Auditing Standards (SAS) No. 61, Communication 
With Audit Committees, and SAS No. 83, Establishing an Understanding 
With the Client, set requirements for auditors to establish an 
understanding with the client regarding the services to be performed 
and to determine that certain matters related to the conduct of an 
audit under generally accepted auditing standards are communicated to 
those who are responsible for overseeing the financial reporting 
process. This exposure draft requires specific communication with the 
auditee, including the audit committee if applicable or other 
equivalent group, regarding the scope of compliance and internal 
control work to be performed under government auditing standards. The 
exposure draft also proposes strengthening the linkage of the auditor's 
report on the financial statements with the auditor's reports on 
compliance with laws and regulations and internal control over 
financial reporting when these reports are issued separately. This 
exposure draft should reduce the risk that either the auditor or 
auditee may misinterpret the needs or expectations of the other party 
and should improve the usefulness of the auditor's reports required 
under government auditing standards. In addition, this exposure draft 
moves a reporting standard on auditor communication, with some 
modification, to a field work standard, as communication on the scope 
of work to be performed on an audit is viewed more appropriately as a 
field work standard. This exposure draft also amends the reporting 
standard on reporting on compliance with laws and regulations and 
internal control over financial reporting, as well as presents 
conforming changes to GAGAS field work standards for financial 
statement audits to recognize the effect of SAS No. 78 on GAGAS for 
internal control, the effect of SAS No. 82 on GAGAS for consideration 
of fraud, and the effect of OMB Circular A-133 on GAGAS for audits of 
state and local governments and nonprofit organizations.
    The Council will consider the comments in making recommendations to 
the Comptroller General of the United States in finalizing revisions to 
the standards. Publication of the final standard will be announced in 
the Federal Register.
Jeffrey C. Steinhoff,
Director of Planning and Reporting, Accounting and Information 
Management Division.
[FR Doc. 98-21359 Filed 8-7-98; 8:45 am]
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