Summary: This letter describes the process used by GAO for revising GAGAS, summarizes the proposed major changes, discusses proposed effective dates, and provides instructions for submitting comments on the proposed standards.
The proposed revision to GAGAS will be the sixth since GAO first issued the standards in 1972. The proposed changes contained in the 2010 Exposure Draft update GAGAS to reflect major developments in the accountability and audit profession and emphasize specific considerations applicable to the government environment. The major changes in the proposed revision were made to: 1) consolidate and reorganize the foundation and ethical principles for government audits and the standards for use and application of GAGAS; 2) add a conceptual framework approach for independence; 3) update the financial audit standards to (1) reflect recent updates to the auditing standards issued by the American Institute of Certified Public Accountants (AICPA), where applicable, (2) more clearly identify the GAGAS requirements and guidance that supplement AICPA requirements for financial audits, and (3) consolidate the financial audit standards into a single chapter; 4) further clarify application of the attestation engagement standards to clearly distinguish the requirements related to each type of attestation work; 5) update the performance audit standards to (1) limit the fraud reporting requirement to occurrences that are significant within the context of the audit objectives, with a requirement to communicate other instances of fraud in writing to those charged with governance, and (2) revise the discussion of validity as an aspect of the quality of evidence; and 6) clarify language throughout the document.
