20040 AUDIT STANDARDS
(Revised 03/08)
Various organizations promulgate audit standards for auditors to follow. Standards are designed to enhance the quality and consistency of audits and audit reports.
Internal Audit Standards
The Institute of Internal Auditors promulgates standards and guidelines for internal auditors in a publication titled the International Standards for the Professional Practice of Internal Auditing (ISPPIA). These standards are designed for all types of internal audits.
The ISPPIA cover independence, professional proficiency, scope of work, performance of audit work, and management of the internal audit organization. However, manegement must ensure that an internal audit organization is independent of the activities and programs it audits.
Government Auditing Standards
The United States General Accounting Office has developed Government Auditing Standards (GAS) for all types of external audits. Government Auditing Standards, a publication by the Comptroller General of the United States and often referred to as the "Yellow Book," explains the standards.
Various federal laws and regulations, such as the Single Audit Act of 1984, the Single Audit Act Amendment of 1996, and the OMB Circular A-133, require that government and non-governmental auditors of State and local governments and various other federal funds recipients follow GAS in order for the results to be accepted by the federal government.
Generally Accepted Auditing Standards
The American Institute of Certified Public Accountants (AICPA) requires adherence to Generally Accepted Auditing Standards (GAAS) for external audits of financial statements and recognizes Statements on Auditing Standards as interpretations of those standards. Statements on Standards for Attestation Engagements supplement these standards. Together these standards provide general framework and guidelines when performing various audits from an external audit perspective.
Quality Assurance Audits
GC 13886.5 requires agencies with internal auditing activities to follow the general and specific standards of internal auditing prescribed by the Institute of Internal Auditors or the Comptroller General of the United States, as appropriate.
In accordance with GC 12430, the DOF may perform quality assurance reviews of the internal audit untis to determine their compliance with appropriate audit standards. The reviews result in audit reports, each containing an opinion that the internal audit unit fully complies, adequately complies, or does not comply with the required standards.
