2017 State and Local Government Audit Planning Considerations

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2017 State and LocalGovernment Audit PlanningConsiderationsA Governmental Audit Quality Center Web EventMay 17 2017 1 00PM 3 00PM ET.
Administrative NotesPlease ensure your pop up blocker is disabled Note the interactive toolbar at the bottom of your screen Download slides and materials by clicking this icon Ask questions by entering your question in the Q A box .
Please click the Help and or Contact Us at the bottom ofyour screen Call AICPA Member Service at 888 777 7077 Governmental Audit Quality Center 2 Trouble Shooting.
Troubleshooting Tips Ensure that your computer speakers are turned on that thevolume is appropriately set Check to ensure that audio streaming is enabled on yourIf the presentation slides stop advancing during the.
presentation Close out of the presentation and re launch the webcastIf you are still having audio or other technicaldifficulty Check with your IT personnel at your firm or state audit organization SAO to ensure that.
this event is not being blocked by a firewall Call the AICPA Service Center at 888 777 7077Governmental Audit Quality Center 3 Continuing Professional EducationYou must answer at least 75 of the random .
attendance checks to earn CPE credit Please respond to the attendance checks during thelive presentation You are not eligible to earn CPE by watching thearchive of this event .
At the end of today s presentation we will providesteps for obtaining your CPE certificateGovernmental Audit Quality Center 4 PresentersHeather Acker CPA.
Baker Tilly Virchow Krause LLPWalker Wilkerson CPACliftonLarsonAllen LLPGovernmental Audit Quality Center 5 What We Will Cover.
Current auditing and accounting developmentsaffecting state and local government financialstatement auditsEmerging practice issues and risky areasGAQC and AICPA resources.
Governmental Audit Quality Center 6 Developments Economic Industry Legislative RegulatoryGovernmental Audit Quality Center 7.
Current Economic Industry DevelopmentsPotential for changes to federal fundingContinued budgetary pressuresGovernance and accountability entity focus on.
Cybersecurity and technology challenges AICPA Cybersecurity Resource Center Cybersecurity and the External Audit Cybersecurity Webcast SeriesContinued expansion of public private partnerships.
Governmental Audit Quality Center 8 Legislative Regulatory DevelopmentsSecurities and Exchange Commission SEC issuedproposed revisions to Municipal Securities Disclosure Rule 15c2 12.
on Municipal Securities Continuing Disclosure Proposes changes to continuing disclosure requirements Comments were due 5 15 17Rule 15c2 12 requires underwriters in primaryofferings of municipal securities to determine .
among other things that the issuer or obligatedperson has agreed to provide to the MunicipalSecurities Rulemaking Board a timely notice ofcertain material events Governmental Audit Quality Center 9.
Legislative Regulatory DevelopmentsRule 15c2 12 proposed changes would amend thelist of events for which notice is to be provided tothe Municipal Securities Rulemaking Board MSRB to include .
incurrence of a financial obligation of the obligated person ifmaterial or agreement to covenants events of default remedies priority rights or other similar terms of a financialobligation of the obligated person any of which affect securityholders if material .
default event of acceleration termination event modification ofterms or other similar events under the terms of a financialobligation of the obligated person any of which reflect financialdifficulties Governmental Audit Quality Center 10.
Legislative Regulatory DevelopmentsOther municipal securities continuing disclosure Interest from SEC s Office of Municipal Securities Enforcement actions occurring that have included issuers 2014 Municipalities Continuing Disclosures Cooperation.
MCDC Initiative Securities Industry Financial Markets Association SIFMA Established a group of municipal securities stakeholders thathave been working to identify and promote voluntaryimprovements in the area of continuing disclosures.
Governmental Audit Quality Center 11 Governmental Audit Quality Center 12 Legislative Regulatory DevelopmentsState or local law or regulation changes Increased interest and focus on pensions and other.
postemployment benefits OPEB by governing bodies Pass through entities are continuing to update policies andcontracts for federal awards to become compliant with Uniform Regulatory agencies should be updating guidance for clarifiedattestation changes.
See later discussion on audit developmentsGovernmental Audit Quality Center 13 Audit Issues DevelopmentsGovernmental Audit Quality Center 14.
Audit Issues DevelopmentsAuditing Standards Board ASB StandardsAffecting 2017 Engagements Statement on Auditing Standards SAS No 132 The Auditor sConsideration of an Entity s Ability to Continue as a Going.
Effective for audits of financial statements for periods ending onor after December 15 2017 Auditor s objectives and related conclusions Use of going concern basis of accounting Substantial doubt about ability to continue as going concern.
Required to ask about period beyond management s assessment Financial statements prepared in accordance with a special purpose frameworkGovernmental Audit Quality Center 15 Audit Issues Developments.
ASB Standards Affecting 2017 Engagements cont SAS No 130 An Audit of Internal Control Over FinancialReporting That Is Integrated With an Audit of FinancialStatements Effective for integrated audits for periods ending on or after.
SAS No 131 Amendment to Statement on Auditing StandardsNo 122 Section 700 Forming an Opinion and Reporting onFinancial Statements Effective for audits of financial statements for periods endingon or after 6 15 16.
Governmental Audit Quality Center 16 Audit Issues DevelopmentsASB Standards Affecting 2017 Engagements cont Statement on Standards for Attestation Engagements SSAE No 18 Attestation Standards Clarification and Recodification.
Issued April 2016 and effective for practitioners reportsdated on or after May 1 2017 Clarified converged and restructured in AT C sections Specific Impact to Pension Accounting Reporting Single Employer or Cost Sharing Multiple Employer Plans .
Census Data Testing at Employers SLG AAG Exhibit 13 3 Agent Plans Reporting for Participating Employers SLG AAG 13 181 A 21 A 22 Be aware of federal state and local government agencies.
requiring attest engagementsGovernmental Audit Quality Center 17 Audit Issues DevelopmentsASB Current Future Projects of Interest New Standard on Auditor Involvement with Exempt Securities.
Covers municipal and other exempt securities Expected to be voted final in May 2017 Proposed effective date For exempt offering documents withwhich the auditor is involved that are initially distributed circulated or submitted on or after June 15 2018 .
Governmental Audit Quality Center 18 Audit Issues DevelopmentsGovernment Accountability Office GAO Government Auditing Standards No changes impacting this year s audits.
See On the Horizon section for information on a recentexposure draft proposing changes to these standards Independence evaluation and documentation continues to be anarea of common deficiency Identification and evaluation of nonaudit services.
Evaluation of management skills knowledge or experience Documentation Governmental Audit Quality Center 19 Audit Issues DevelopmentsEmphasis on Quality.
AICPA Enhancing Audit Quality Project EAQ enhancedoversight of peer reviews Peer Review checklist updated for GASB Statement No 72 FairValue Measurement and ApplicationYou can access the AICPA.
Peer Review Checklists and use them toperform engagement preissuance reviews Governmental Audit Quality Center 20 Audit Issues DevelopmentsAICPA Audit and Accounting Guide State and Local.
Governments SLG Guide Available Summer 2017 Authoritative status Category B GAAP and AICPA AuditingInterpretive Publication Level B GAAS Key Changes New Chapter addressing OPEB for Plans Employers ER .
Part 1 Plan Accounting Financial Reporting andAuditing Considerations for Defined Benefit OPEB PlansAdministered Through a Qualifying Trust Part 2 ER Accounting OPEB Administered Through aQualifying Trust Single and Agent ER.
Part 3 ER Accounting OPEB Administered Through aQualifying Trust Cost Sharing ER Part 4 ER Accounting OPEB Not Administeredthrough a Qualifying TrustGovernmental Audit Quality Center 21.
Audit Issues DevelopmentsSLG Guide cont Key Changes cont Existing OPEB guidance for employers GASB 45 isretained in the text of the rest of the Guide.
GASB 73 Pensions Not Administered through a Qualifying Incorporated in the pension chapter through the use ofboxes calling out differences when there is no qualifying Other Updates GASB 80 Blending Requirements.
GASB 81 Irrevocable Split Interest Agreements GASB 82 Pension IssuesGovernmental Audit Quality Center 22 Audit Issues DevelopmentsSLG Audit Guide cont .
Key Changes cont Census Data Pension chapter expands discussion foraudits of Cost Sharing Employers Importance of documentation of risk of materialmisstatement RMM to the employer financial.
statements based on specifics of the plan andallocation of pension amounts Census data impacts collective pension liability Understand how the collective pension liability isallocated to employers i e proportionate share .
and design testing at employer level to address theelements of census data that may result in a RMM atthe employer level Governmental Audit Quality Center 23 Accounting.
DevelopmentsGovernmental Audit Quality Center 24 GASB StatementsEffective for 6 30 17 Year Ends GASB 74 OPEB Plans.
GASB 80 Blending Requirements GASB 82 Pension Issues Implementation Guide 2016 1Governmental Audit Quality Center 25 GASB Statements.
Effective for 12 31 17 Year Ends GASB 81 Irrevocable Split InterestAgreementsGovernmental Audit Quality Center 26 GASB 74 75 OPEB.
GASB 74 Plans and GASB 75 Employers arealmost identical to their pension siblings i e GASB67 Plans and 68 Employers except for Pension lessons learned have been built into the base Adjustments to better fit retiree healthcare have been made.
e g recognizing implicit rate subsidies and requiring sensitivityanalysis for healthcare trend rate There is an alternative measurement method permitted for verysmall plans 100 or fewer total participants Governmental Audit Quality Center 27.
GASB 74 75 OPEBMajor impacts of GASB 75 vs its predecessor Net or total OPEB liability is now recorded in Statement of Net Strictly prescribed actuarial methodology and discountingguidance will produce a different often higher OPEB liability.
than GASB 45 Annual measurement dates are now required using eitherannual or biennial valuations Triennial valuations no longer allowed Much more robust note and required supplementary information.
RSI is requiredGovernmental Audit Quality Center 28 GASB 74 OPEB Plan Standard Effective for June 30 2017 plan year ends and later Implementation Guidance Update No 2017 2 Financial Reporting.
for Postemployment Benefit Plans Other Than Pension Plans recently issued Plan accounting and reporting required when a trust or equivalentarrangement exists Plan financial statements may be either issued separately or as a.
fiduciary fund in the financial statements of the sponsoringgovernmentTrusted OPEB plans are most often administered bythe sponsoring employer unlike pension plans OPEB reimbursement trusts whose sole purpose is to accumulate.
and invest assets and make reimbursement payments to theemployer is a common model Governmental Audit Quality Center 29 GASB 75 OPEB Employer Standard Effective for June 30 2018 employer year ends and later.
Implementation guide scheduled for 2017 exposure andDivided into two primary sections OPEB provided through plans administered as trusts orequivalent arrangements i e meets paragraph 4 of GASB 75requirements .
OPEB provided through plans that are NOT administered astrusts or equivalent arrangements i e does not meetparagraph 4 of GASB 75 requirements Governmental Audit Quality Center 30 GASB 74 75 OPEB.
2017 State and Local Government Audit Planning Considerations. A Governmental Audit Quality Center Web Event. May 17, 2017 1:00PM – 3:00PM ET

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