Spring 2012 issue of Horizons

Public Sector

HowRegulatory Changes Will Affect Your Entity’s Audit By Julia Stone, CPA

In recent months, there have been various regulatory changes in the governmental sector affecting both auditors and preparers of governmental financial statements. These changes include modifications to “Yellow Book” standards as well as pending changes in the threshold requiring an audit in accordance with Office of Management and Budget (OMB) Circular A-133. 2011 Yellow Book Independence and Other Changes You may have noticed that your external auditors are sometimes unable to perform nonaudit or consulting

services for your entity. The reason for this inability is because rules that govern independence changed significantly in 2002 after the Enron collapse and other unprecedented financial frauds. The accounting profession addressed these changes by creating new rules that expand what services impair independence. Independence is one of the most important cornerstones of the audit profession. Without independence, auditors would not be able to remain objective, which affects our ability to render opinions on your financial statements. As auditors, we need to maintain our independence both in fact and in appearance.

Raise Your Expectations

35