AGA's Financial Management Standards Board (FMSB) has issued a comment letter on two Exposure Drafts of the Governmental Accounting Standards Board (GASB): Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards and The Hierarchy of Generally Accepted Accounting Principles for State and Local Government. The FMSB believes that moving the hierarchy of Generally Accepted Accounting Principles from the auditing literature to a GASB statement is a wise decision and one that is especially appropriate in light of the Financial Accounting Standards Board codification project and the convergence of international with national standards. Including in GASB guidance the three issues discussed in the codification Exposure Draft--related party transactions, subsequent events and going concern considerations--would help to more appropriately place presentation of principles used in the preparation of financial statements in accounting and financial reporting standards, the FMSB stated.
READ THE LETTER
Showing posts with label AICPA. Show all posts
Showing posts with label AICPA. Show all posts
Monday, October 27, 2008
Friday, October 03, 2008
AGA Research Study Finds That SAS 70 Reports Are Useful to Governments But Could Be Improved
Alexandria, VA (October 3, 2008) - Today, the Association of Government Accountants (AGA) released the results of a research study that examined the usefulness of the American Institute of Certified Public Accountants' (AICPA) Statement on Auditing Standards (SAS) No. 70, Service Organizations, report to governments.
SAS 70 Reports: Are They Useful and Can They Be Improved? addresses the usefulness of SAS 70 and whether improvements would increase its usefulness. SAS 70 reports are used by numerous federal and state agencies when they outsource their financial systems and services, most commonly payroll.
The significant findings of the research were that:
1) User organizations do not always obtain the information they need from the SAS 70 report;
2) The controls tested by the service organization's auditor may not be those that are considered important by the user organization;
3) Generally, user organizations do not have significant input to the scope or systems to be covered by the SAS 70 report.
The study used a series of face-to-face meetings, telephone interviews and Internet surveys with selected users as well as state and federal government auditors to gauge their usage and success levels. SAS 70 reports communicate information and assurance about the controls of the service organization that are of interest to user organizations and their auditors as they relate to an audit of the financial statements. Service organizations have become a critical part of some user organizations' overall system of internal control over financial and operational reporting.
The passage of the Sarbanes-Oxley Act caused an increase in the usage of SAS 70 reports as a way to better evaluate the control environment for outsourced functions. They have limitations, such as not meeting FISMA requirements and the AICPA is considering changing some requirements. Users should also keep up with the planned changes in the relevant professional standards (both AICPA and International Standards) that will enhance the overall concept of the service auditor's report from the SAS 70 examination level report to an attest report where management of the service organization will assert to their controls as a component of the audit report. Details of those planned changes are included in the research report.
"The federal government has seen a big increase in the outsourcing of functions, especially financial functions, in the past decade," said AGA Director of Research Anna D. Gowans Miller, MBA, CPA. "The organization that outsources its financial functions is still responsible for providing assurance that the controls are adequate and, with proper planning and communication with the service provider, SAS 70 reports provide a cost-effective way for the user organization to provide this assurance."
The research project was sponsored by Ernst & Young LLP's Federal Assurance and Advisory Practice. AGA's Miller led this effort. She was aided by Werner Lippuner and James Merrill, both with Ernst & Young LLP.
View the report.
Questions: Contact Anna Miller at 800.AGA.7211, ext. 313.
SAS 70 Reports: Are They Useful and Can They Be Improved? addresses the usefulness of SAS 70 and whether improvements would increase its usefulness. SAS 70 reports are used by numerous federal and state agencies when they outsource their financial systems and services, most commonly payroll.
The significant findings of the research were that:
1) User organizations do not always obtain the information they need from the SAS 70 report;
2) The controls tested by the service organization's auditor may not be those that are considered important by the user organization;
3) Generally, user organizations do not have significant input to the scope or systems to be covered by the SAS 70 report.
The study used a series of face-to-face meetings, telephone interviews and Internet surveys with selected users as well as state and federal government auditors to gauge their usage and success levels. SAS 70 reports communicate information and assurance about the controls of the service organization that are of interest to user organizations and their auditors as they relate to an audit of the financial statements. Service organizations have become a critical part of some user organizations' overall system of internal control over financial and operational reporting.
The passage of the Sarbanes-Oxley Act caused an increase in the usage of SAS 70 reports as a way to better evaluate the control environment for outsourced functions. They have limitations, such as not meeting FISMA requirements and the AICPA is considering changing some requirements. Users should also keep up with the planned changes in the relevant professional standards (both AICPA and International Standards) that will enhance the overall concept of the service auditor's report from the SAS 70 examination level report to an attest report where management of the service organization will assert to their controls as a component of the audit report. Details of those planned changes are included in the research report.
"The federal government has seen a big increase in the outsourcing of functions, especially financial functions, in the past decade," said AGA Director of Research Anna D. Gowans Miller, MBA, CPA. "The organization that outsources its financial functions is still responsible for providing assurance that the controls are adequate and, with proper planning and communication with the service provider, SAS 70 reports provide a cost-effective way for the user organization to provide this assurance."
The research project was sponsored by Ernst & Young LLP's Federal Assurance and Advisory Practice. AGA's Miller led this effort. She was aided by Werner Lippuner and James Merrill, both with Ernst & Young LLP.
View the report.
Questions: Contact Anna Miller at 800.AGA.7211, ext. 313.
Friday, April 13, 2007
EVENT - A New Road to Improved Financial Management in Government: Process-Based Financial Reporting
The Government Results Center In Association with the United States Department of Agriculture and Grant Thornton Present:
GOVERNMENT ENTERPRISE INTEGRATORS GROUP (GEIG) Meeting
Tuesday April 17, 2007, 8:45-Noon, [Agenda]
A PRACTITIONERS SERIES FORUM ON: "A New Road to Improved Financial Management in Government: Process-Based Financial Reporting"
Meeting location is in the Jefferson Auditorium, U.S. Department of Agriculture, 12th and Independence Avenue, S.W.
The purpose of the Government Enterprise Integrators Group is to enable sharing between government agencies and offices of lessons learned and better practices to integrate planning, budgeting, financial management, execution through people, technology and evaluation feedback into an effective performance management system.
All GEIG meetings are free of cost but restricted to government officials or public administration academics. Reservations are required for security, badge preparation, and copying of handouts.
In 2006 the Association of Government Accountants (AGA), with funding from the Grant Thornton’s Global Public Sector group, initiated a research study to determine the applicability of process-based accounting to federal agencies. Process-based accounting was first proposed by James A. Brimson in his book The Handbook of Process-Based Accounting: Leveraging Processes to Predict Results (American Institute of Certified Public Accountants, 2002). Through interviews with 28 Federal Chief Financial Officers and other top government executives involved in financial management, the survey revealed a need for financial and performance reporting that was not focused on compliance but rather toward providing information necessary for sound business decisions.
The GEIG April session will feature an explanation of process-based accounting in developing integrated financial and performance reports. Secondly, we will explore how all federal agencies might use process-based accounting tools to increase transparency, highlight problems and opportunities for operations improvement, and increase the amount of forward-looking information for decision-making. Finally, we will consider how some agencies are integrating and institutionalizing these tools to create value-added financial and performance reports.
REGISTER HERE
GOVERNMENT ENTERPRISE INTEGRATORS GROUP (GEIG) Meeting
Tuesday April 17, 2007, 8:45-Noon, [Agenda]
A PRACTITIONERS SERIES FORUM ON: "A New Road to Improved Financial Management in Government: Process-Based Financial Reporting"
Meeting location is in the Jefferson Auditorium, U.S. Department of Agriculture, 12th and Independence Avenue, S.W.
The purpose of the Government Enterprise Integrators Group is to enable sharing between government agencies and offices of lessons learned and better practices to integrate planning, budgeting, financial management, execution through people, technology and evaluation feedback into an effective performance management system.
All GEIG meetings are free of cost but restricted to government officials or public administration academics. Reservations are required for security, badge preparation, and copying of handouts.
In 2006 the Association of Government Accountants (AGA), with funding from the Grant Thornton’s Global Public Sector group, initiated a research study to determine the applicability of process-based accounting to federal agencies. Process-based accounting was first proposed by James A. Brimson in his book The Handbook of Process-Based Accounting: Leveraging Processes to Predict Results (American Institute of Certified Public Accountants, 2002). Through interviews with 28 Federal Chief Financial Officers and other top government executives involved in financial management, the survey revealed a need for financial and performance reporting that was not focused on compliance but rather toward providing information necessary for sound business decisions.
The GEIG April session will feature an explanation of process-based accounting in developing integrated financial and performance reports. Secondly, we will explore how all federal agencies might use process-based accounting tools to increase transparency, highlight problems and opportunities for operations improvement, and increase the amount of forward-looking information for decision-making. Finally, we will consider how some agencies are integrating and institutionalizing these tools to create value-added financial and performance reports.
REGISTER HERE
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