Summary: In response to a congressional request, GAO reviewed the quality of audits performed by certified public accountants (CPA) to determine: (1) their compliance with professional standards; (2) the extent of quality problems on audits of federal funds; and (3) the causes of these problems.
In its review of quality control systems used by federal inspectors general (IG), GAO found that: (1) IG have identified significant numbers of problem reports and audits; (2) IG have identified reporting problems needing correction in one out of four audit reports reviewed; (3) IG did not accept one in five audits in which the required audit work was not performed, or the audit documentation was inadequate or unclear after reviewing the auditors' working papers; and (4) although IG worked with CPA to correct problems on individual audits, additional efforts are needed to make use of the data in these individual case files. GAO also found that IG: (1) have uneven policies and practices for reviewing the work of CPA; (2) rarely take action against CPA when they identify unacceptable audit work; and (3) do not systematically compile, analyze, and use the results of their quality control reviews (QCR) to correct recurring audit quality problems.
