Overview

An auditor may be engaged to perform compliance audits on governmental financial assistance that is not covered under the Single Audit Act and OMB Circular A-133. For example, the auditor may be engaged to test and report on compliance with laws and regulations relating to state or local governmental financial assistance. Another common example is when a for-profit entity receives governmental financial assistance and is required under the terms of the grant or contract to undergo a compliance audit. These audits are normally required to be performed under Government Auditing Standards and are similar in nature to a single audit. When engaged to perform such an audit the auditor should consult state or local officials or other sources (such as federal agency audit guides) concerning the nature and scope of the required testing.

Although these governmental audits are outside the scope of the AICPA Audit Guide, Government Auditing Standards and Circular A-133 Audits, they often require compliance testing and audit reporting that is similar to that in a single audit. For this reason, auditor's engaged to perform compliance audits on governmental financial assistance that are not covered by the Single Audit Act and Circular A-133 should consider the guidance in that Guide, particularly as it relates to compliance testing and the appropriate form of reporting.