Nonprofit Auditing and Accounting Update (2008–2009 Edition)

Ideal for self-study or on-site training!

Ever have a discussion with a client or auditor regarding a recent not-for-profit accounting or auditing development and not have a clue regarding what they were talking about? Get more than just a clue, solve the entire case through this timely update designed to help you understand the latest accounting and auditing developments affecting not-for-profits.

• Review key accounting and reporting issues for not-for-profits
• Plan for new pronouncements issued or pending by the FASB that will affect not-for-profits
• Review the July 2007 Yellow Book and related GAO guidance that has subsequently been issued
• Review the federal study on A-133 audit quality and its potential ramifications on future A-133 audits
• Understand the effect of SAS No. 112 on Yellow Book and A-133 engagements
• Understand the latest standards issued by the AICPA relating to not-for-profits and also standards on the horizon

Prerequisite: Knowledge of nonprofit auditing and accounting

Videocourse Details

View the video clip

In the video, W.A. Broadus, Jr., CPA, CGFM, president of W.A. Broadus, Jr., CPA, PC, a respected consultant in the governmental and nonprofit area, employed for several years with the GAO, and author of many AICPA professional development courses, interviews Peter B. Bell, CPA, CGFM, consultant and trainer in Washington, DC, employed for several years with the Department of Housing and Urban Development; Marcia Buchanan, CPA, CGFM, Assistant Director, GAO; Allen L. Fetterman, CPA, retired partner of Loeb & Troper and lecturer; John Fisher, CPA, Director–NEAR of the U.S. Department of Health and Human Services in Kansas City, MO; Mary Foelster, CPA, AICPA Director–Governmental Auditing and Accounting; Jill R. O’Brien, project manager of the Federal Audit Clearinghouse of the U.S. Bureau of the Census in Washington, DC; James S. Remis, CPA, partner, Federman, Lally & Remis LLC, in Farmington, CT; and Joel Tanenbaum, CPA, AICPA Technical Manager–Accounting Standards.

*(195-min. video) The DVD disk contains the video presentation and a viewable copy of the Manual.
**The Additional Manual is for group study training only. Unlike other formats, it has no exam answer sheet and cannot be used to earn self-study credit.

Chapter 2 - AICPA Activities

Learning Objectives

Gain additional insight into the implementation of the risk assessment SASs.

• Review the technical and miscellaneous activities of the AICPA.
• Understand key documentation dates in SAS No. 103.
• Obtain a more solid understanding of SAS No. 112 by working through an exercise involving the assessment of control deficiencies when compensating controls exist.

Introduction
This chapter will provide a wide range of updates on the areas listed above.

Implementation of the Risk Assessment SASs

Where are we now?
In March 2006, the Auditing Standards Board (ASB) of the AICPA issued eight new statements
on auditing standards (SAS) related to risk assessment. The SASs are as follows:

• SAS No. 104, Amendment to Statement on Auditing Standards No. 1, Codification of
Auditing Standards and Procedures (“Due Professional Care in the Performance of Work”)
• SAS No. 105, Amendment to Statement on Auditing Standards No. 95, Generally Accepted Auditing Standards
• SAS No. 106, Audit Evidence
• SAS No. 107, Audit Risk and Materiality in Conducting an Audit
• SAS No. 108, Planning and Supervision
• SAS No. 109, Understanding the Entity and Its Environment and Assessing the Risks of Material Misstatement
• SAS No. 110, Performing Audit Procedures in Response to Assessed Risks and Evaluating the Audit Evidence Obtained
• SAS No. 111, Amendment to Statement on Auditing Standards No. 39, Audit Sampling

The primary objective of these standards is to enhance auditors’ application of the audit risk model in practice by specifying, among other things:

Since the risk assessment standards (SAS No. 104 to SAS No. 111) are interrelated they all become effective for audits of financial statements for periods beginning on or after December 15, 2006.

Developed in Concert
In developing the risk assessment standards the ASB worked in concert with the International Auditing and Assurance Standards Board of the International Federation of Accountants and, therefore, the project was representative of the effort among standard-setters to promote the convergence and acceptance of an international set of auditing standards. Finally, the standards represent part of the ASB’s ongoing effort to develop stronger and more definitive auditing standards that are intended to enhance auditor performance and thereby improve audit effectiveness.

Synopsis of the Risk Assessment Standards
See Appendix 2A for a synopsis of the risk assessment standards.

Implementation Tools Available
With the issuance of the standards, the AICPA undertook a comprehensive campaign to provide implementation guidance to assist the audit profession. These efforts include the issuance of:

• An audit risk alert entitled Understanding the New Auditing Standards Related to Risk Assessment (available at www.cpa2biz.com). This document is intended to provide auditors with an overview of the risk assessment standards to be used in the planning and performance of a financial statement audit.
• The audit guide entitled Assessing and Responding to Audit Risk in a Financial Statement Audit (available at www.cpa2biz.com). The purpose of the guide is to help auditors fulfill their responsibilities for assessing risk in a financial statement audit that is performed in accordance with GAAS.
• Two articles in the Journal of Accountancy in 2006 and 2007. These articles are entitled Assessing and Responding to Risks in a Financial Statement Audit parts I and II.
• Three risk assessment CPE courses (available at www.aicpalearning.org). These courses are entitled Auditor’s Risk Assessment Process: Tackling the New Risk Assessment SASs, Risk Assessment Standards - Understanding the Entity and Assessing Risk, and Detecting Misstatements: Integrating SAS 99 and the Risk Assessment Standards.

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