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2020

COVID-19 Extensions Related to Governments

In an effort to keep you informed about how the COVID-19 pandemic is affecting your single audits, we have summarized a few topics that will help you navigate the ever-changing landscape.

COVID-19 Extensions Related to Governments

This spring, as shelter-in-place orders were put in place across the country, a number of different entities took action to extend deadlines of interest to local governments and their auditors. The following is a summarized list of extensions of which you should be aware. Please access the individual entities’ websites for specific details.

Omnibus 2020: What’s Changing?

In January 2020, GASB issued GASBS No. 92, Omnibus 2020. The amendments included in the new statement aim to improve comparability and consistency related to accounting and financial reporting requirements included in authoritative literature. The Omnibus title indicates that the statement addresses several different areas of governmental accounting and reporting, each with its own effective date.

New SAS and SSAE on Materiality – Why Change?

The new SAS and SSAE make subtle changes to the definition of materiality so that it more closely aligns with those of the United States judicial system, SEC, PCAOB, and other U.S. standard setters. The new definition doesn’t match any one definition exactly, but rather moves the definition closer to the definition currently used in practice by the various entities. The ASB doesn’t believe that adoption of the new standards will significantly change current practice.

GASB Issues Implementation Guide for Leases

In August 2019, the GASB issued Implementation Guide No. 2019-3, Leases, to clarify, explain, and elaborate on the requirements of GASBS No. 87, Leases. Background –  GASBS No. 87 was issued in June 2017 and became effective for reporting periods beginning after December 15, 2019. Not long after issuance, GASB began developing implementation questions which culminated in an exposure draft being issued in February 2019. There are some significant differences between the exposure draft and the final Implementation Guide.

AICPA Issues SAS No. 137 on Other Information

In July 2019, the AICPA issued SAS No. 137, The Auditor’s Responsibilities Relating to Other Information Included in Annual Reports, which supersedes AU-C 720, Other Information in Documents Containing Audited Financial Statements. The superseded standard is now codified in AU-C 720A, and SAS No. 137 is codified in AU-C 720. In accordance

2019

Future Changes to Auditor’s Report

In May, the AICPA issued SAS No. 134, Auditor Reporting and Amendments, Including Amendments Addressing Disclosures in the Audit of Financial Statements, a suite of auditor reporting standards. This suite of auditor reporting standards is the result of the AICPA’s ongoing Auditor’s Report project. SAS No. 134 supersedes, replaces, adds, and amends many AU-C sections, including 200, 210, 220, 230, 240, 260, 300, 315, 320, 330, 450, 510, 540, 570, 600, 700, 701, 705, 706, and 910.

OMB Releases Revised Compliance Supplement

On September 20, 2019, the OMB released a revised edition (dated August 2019) of the 2019 Compliance Supplement. The August 2019 edition replaces the June 2019 edition in its entirety. As discussed in the October 2019 issue of this newsletter, the revised edition was necessary due to a significant number of errors and other issues that were identified by the AICPA and other stakeholders as they reviewed the initial edition.

Errors Discovered in the 2019 Compliance Supplement

Auditors performing Single Audits for 2019 should be aware of errors and inconsistencies in the OMB’s June 2019 Compliance Supplement. In response to questions and comments by users, the AICPA issued a formal 16-page comment letter to the OMB on August 5, 2019, concerning these issues and requesting action by the OMB.

2019 Compliance Supplement Released

On July 1, 2019, the Office of Management and Budget (OMB) released the 2019 Compliance Supplement. Unlike the 2018 Compliance Supplement, which was referred to by some as a “Skinny” Supplement (because it only modified sections of the 2017 Compliance Supplement that were in need of significant revisions), the 2019 Compliance Supplement is a standalone document that has over 1,600 pages.

Revised Ethics Interpretation for Government Client Affiliates

In June 2019, the AICPA’s Professional Ethics Executive Committee adopted the revised ethics Interpretation, “State and Local Government Client Affiliates.” This revised Interpretation is under the Independence Rule and is codified at ET 1.224.020.

2019 Compliance Supplement Released

On July 1, 2019, the Office of Management and Budget (OMB) released the 2019 Compliance Supplement. Unlike the 2018 Compliance Supplement, which was referred to by some as a “Skinny” Supplement (because it only modified sections of the 2017 Compliance Supplement that were in need of significant revisions), the 2019 Compliance Supplement is a standalone document that has over 1,600 pages.

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