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recommendations identified in previous audits, attestation engagements, or studies can help auditors evaluate the subject matter or the assertion associated with the attestation engagement.

Many tools can help the auditors evaluation the subject matter.

The auditors have no way of getting access to the information.

In general, the auditor will want to concentrate on the steps that are relevant to the phase of the acquisition being reviewed.

The auditor has a set of steps to follow when reviewing acquisitions.

Auditors do not care for standard procedures and will use any steps they deem necessary in acquiring data.

The audits conducted by the General Accounting Office (GAO) and reported in June 1999, confirmed the Inspector General's findings as to the factors causing systemic errors in grantee case reporting.

There were errors found in the grantee case reporting.

The GAO did not reveal any information regarding the grantee case reporting.

The practitioner [auditor] shall perform an engagement only if he or she has reason to believe that the subject matter is capable of evaluation against criteria that are suitable and available to users.

The auditor only needs to perform an engagement if he thinks the subject matter can be evaluated.

The auditor will always refuse to perform an engagement.

Auditors should consider the significance of a program or program component and the potential use that will be made of the audit results or report as they plan a performance audit.

Auditors should consider the significance of a program that will result from an audit result.

Auditors should consider the significance of a program that will result from a case study.

Accountability describes what we do, integrity describes how we do our work, and reliability describes how we want our work to be received.

How the work is done, is summed up in the word integrity.

Integrity concerns what people do and not how they conduct themselves.

Internal auditors may be required to verify that the equipment or software pass the specified tests.

The software has to be verified by the auditors.

External auditors and internal auditors cannot be separated when testing software.

Auditors should submit written audit reports to the appropriate officials of the audited entity and to the appropriate officials of the organizations requiring or arranging for the audits, including external funding organizations such as legislative bodies, unless legal restrictions prevent it.

Reports from the auditors need to be given to both the audited entity and those requesting the audit.

No written, verbal or electronic reports are required from the auditors.

Audit requirements for RSSI will be established in a collaborative effort by the Office of Management and Budget (OMB) and the General Accounting Office (GAO).

The OMB and GAO work together to establish RSSI audit requirements.

The OMB and GAO does not work together on any projects.

8.47 Being convincing requires that the audit results be responsive to the audit objectives, the findings be presented persuasively, and the conclusions and recommendations follow logically from the facts presented.

Being convincing requires that the audit results be responsive to the audit objectives.

The audit results do not need to respond to the audit objectives to be convincing.

However, an unqualified audit opinion by itself does not ensure that the information needed to measure and manage performance is useful, relevant, timely, or reliable.

An unqualified audit opinion does not ensure the information is useful.

The information needed to measure and manage performance is worthless, irrelevant and a waste of time.

We focused primarily on the management framework that these organizations had established rather than on the specific controls that they had chosen, because previous audit work had identified security management as an underlying problem at federal agencies.

The framework of management was our biggest focus .

The previous audit work was unhelpful in determining whether security management was issue or not in the agencies.

Many participants believed that the PCAOB's most immediate priority should be implementing a disciplinary process to let the public know that failed auditing will be dealt with and trust can be restored.

PCAOB is being pressured by participants to address the issue of failed audits.

PCAOB has an outstanding record, and is one of the few companies that has never had a failed audit.

Boards and auditors need to be vigilant to ensure that any inappropriate actions are avoided.

Auditors need to be careful that people don't do inappropriate things.

Auditors should not be concerned if they see something inappropriate.

Andersen may have been the auditor for more than its fair share of the entities associated with the most recent accountability failures, but it was not the auditor for all of them.

Andersen audited many of the most recent accountability failures.

Andersen did not audit many of the most recent accountability failures.

Professional judgment is necessary to evaluate this information and determine if the agency conducted an adequate requirements analysis.

The agency's analysis must be evaluated with the help of professional judgment.

The agency's requirements analysis required no special evaluation, as the information therein is

The prospect of being audited may be one of life's most stressful experiences, so I can only imagine how daunting it would be if I had to do so without any professional assistance.

Without any assistance, being audited would be overwhelming.

I experienced an audit last year and it was a breeze.

The audit report should include the objectives, scope, and methodology; the audit results, including findings, conclusions, and recommendations, as appropriate; a reference to compliance with generally accepted government auditing standards; the views of responsible officials; and, if applicable, the nature of any privileged and confidential information omitted.

The audit report should have the methodology included.

The audit report shouldn't have the methodology included.

In planning examination-level attestation engagements, auditors should design the engagement to provide reasonable assurance of detecting fraud, illegal acts, or other noncompliance that could have a material effect on the subject matter or assertion of the attestation engagement.

Auditors must ensure that fraud or other illegal acts don't impact the attestation engagement.

Auditors should design the engagement to provide maximum fun for the organization's employees.

Second, auditors should not audit their own work when the work involved is material to the subject matter of the audit.

It's important that auditors do not audit work of their own if the work is material to the purpose of the audit.

Auditors should always audit their own work, no matter what.

108 should determine if other auditors have worked to establish the validity and reliability of the data or the effectiveness of the controls over the system that produced the data.

It needs to be determined by 108 if the data and system controls have been audited and marked as valid by others.

There is no need to verify if the data is reliable.

Transactions should be promptly recorded to maintain their relevance and value to management in controlling operations and making decisions.

Records of transactions help maintain relevance and value in controlling operations.

Management does not care about the transactions and does not record them or use them in any way.

Nonetheless, an expectation gap may still exist as users may be expecting that an audit addresses internal control over the company's overall operations and performance.

Users might think an audit addresses internal control instead of the big picture.

Users understand that the purpose of an auditor is to look at the whole company.

An awareness of these potential users' interests and influence can help auditors understand why the program operates the way it does.

Knowing the interests of potential users lends insight into the operation of the program.

The interests of the users does not influence the design of the program.

Auditors face similar considerations when using the work of nonauditors (consultants, experts, specialists, and so forth).

Auditors and nonauditors have the same set of rules when working.

Auditors don't face any of the same considerations of nonauditors.

Providing continuing attention to significant findings and recommendations is important to ensure the benefits of audit work are realized.

Significant findings and recommendations are important to ensure benefits of audit work are realized.

Attending to recommendations is not necessary

In reporting the scope of the audit, auditors should describe the depth and coverage of work conducted to accomplish the audit's objectives.

The audit has a defined scope which auditors use.

The audit has no scope, auditors do what they feel is right.

Although not required by the act, the state Comptroller had each state agency also produce audited financial statements, thereby ensuring accountability at every level of government rather than solely at those levels considered material to CAFR.

Comptrollers can give financial statements if they wish.

Comptrollers are required to produce audited statements.

Participants also suggested that the one-page audit opinion should be replaced with tiered reporting of audit results, where firms can obtain the level of assurance they desired.

The current single page audit opinion was deemed insufficient and participants requested a multi-tiered approach be instituted.

Participants asked that the audit opinion be replaced by a birthday cake order form.

More also needs to be done to address the continuing expectations gap regarding what auditors are doing in connection with the detection of fraud and internal controls, and to audit through electronic information systems rather than around them.

We need to do more to address the gap between what auditors are doing and what we expect them to do.

We need to do more to address the gap between what auditors are planning and what we see them doing.

For example, in NSIAD's study of conditions on submarines, auditors spent time aboard submarines in a variety of situations, getting firsthand knowledge of life in these vessels.

Auditors tried different experiences in submarines and became familiar with them.

Auditors were not allowed in submarines and were unfamiliar with them.

Some participants liked the idea of auditors periodically performing more of a forensic-type audit6 in which auditors would be more skeptical of management, but cautioned that this approach could have a negative effect on audit quality because management and the auditor might not work as actively together on an ongoing basis.

There were a few that were in favor of more audits.

They had no idea they were being monitored.

In assessing the postaward phase, the auditor should ensure that the agency has not accepted equipment or software that does not meet its requirements.

Auditors should make sure that agencies do not use equipment or software that is not up to code.

Checking the status of the equipment and software of agencies is a waste of time.

It would be relegated largely to after the fact audits as opposed to its current pre-approved role.

It would be related to audits done after the fact.

It would be related to audits done before it happens.

In order to review an acquisition that is using prototypes, the auditor should determine what regulations or guidance the agency has to define a prototyping methodology.

The auditor should first review the methodology of the agency before the acquisition.

The auditor only reviews the acquisition itself, nothing else.

The chapters of this audit guide focus on logically distinct steps of the acquisition process, as described on page 10 of GAO's acquisition model.

Page 10 of GAO's acquisition model describes logically distinct steps of the acquisition process.

Logicality is not essential to the steps of the acquisition process.

This site promotes the sharing information and knowledge pertaining to the internal auditing profession across associations, industries, and countries.

The site promoted freedom of knowledge and information.

The information which the site wanted to be freed was about the treatment of animals in farms.

An auditor should recognize that there are different system development models that may be used when a system development effort is acquired.

Different system development models exist.

Auditors should force their client to adopt the recognized system development model.

For example, when this work includes examination of management's records, the audit documentation should describe those records so that an experienced reviewer would be able to examine those same records.

Audit documentation will be subject to reading by a reviewer.

Management's records are not exempted from examination.

The auditor may also choose to report total problems reported and resolved or break them out by level of priority.

Either amount or level can be used when reporting.

The only available option is to report by priority.

effectiveness and results audits, economy and efficiency audits, operational audits, and value-for-money audits.

There are many types of audits.

There is only one type of audit.

The reporting standards for performance audits relate to the form of the report, the report contents, report quality, and report issuance and distribution.

The reporting standards for performance audits relate to five subjects.

The reporting standards for performance audits do not relate to the form of the report.

Auditors' Responsibilities

Auditors' have tasks or actions that they are responsible for completing.

Auditors' have no responsibilities other than showing up for work.

Auditors should include in the report the audit objectives and the scope and methodology used for achieving the audit objectives.

Auditors should put objectives in the report.

Auditors should not put objectives in the report.

One is tempted to argue that there should be a defensible study, but the problem is obvious- some private firms undoubtedly base contracts on the judgment of the managers involved.

The judgement of managers is undoubtedly the basis for some contracts.

Contracts are based strictly on empirical evidence that can be verified by outside auditors.

7 However, participants cautioned that reporting only on internal controls over financial reporting could lead to more of a gap in what investors perceive as the scope of the auditor's work.

Investor perceptions of the scope of auditing is one of the potential ramifications of focusing reports exclusively on internal controls as they relate to financial reporting.

Participants didn't say anything about what narrow reporting on internal controls might mean for how investors understood the scope of auditing.

However, it was recognized that an audit cannot create precision or certainty where such factors do not exist, as financial statements are not as precise as users may believe.

An audit cannot create precision or certainty where such factors do not exist.

Financial statements are extremely precise, but not many people believe this.

Chapter 2 of this exposure draft discusses nonaudit services provided by audit organizations that are not covered by GAGAS.

Chapter 2 covers services that arent audits preformed that arent covered by GAGAs.

Chapter 2 covers lunchtime procedure for the auditors.

If a profile exists from an earlier assignment, the auditor should review and update it.

The auditor should review and update existing profiles from an earlier assignment.

The auditor should leave a profile existing from an earlier assignment alone.

Caution was also urged that rotation of audit partners required by the Sarbanes-Oxley Act of 2002 does not have the unintended consequence of adversely affecting the quality of audits through loss of experience with a particular company's operations and financial reporting.

Rotating audit partners does not lead to lower quality results.

Rotating auditors has very negative consequences in the results.

Third, they want to observe those flaws, examine them, discuss them, and figure out whether they're manageable.

They want to observe, examine and discuss those flaws to figure out whether they can be solved.

They didn't bother observing and examining the flaws, they just assumed they weren't manageable.

In addition, auditors performing attestation engagements may wish to refer to the internal control guidance published by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

Auditors have the COSO Tradeway Commission to utilize when doing attestation engagements.

COSO offers no guidance to auditors.

If the attestation engagement is part of a larger audit, this information may be communicated as part of that audit.

The attestation engagement can be considered part of a larger audit.

The attestation engagement information can't be considered part of the audit.

Auditors should use indicators appropriate to the project under review and for which data are available.

Project specific indicators should be used for the project under review.

Auditors shouldn't use indicators relevant to the current project.

A participant added that earlier mandatory internal control reporting probably would have surfaced problems with ineffective boards of directors and audit committees.

A participant added that earlier mandatory internal control reporting probably would have surfaced problems with ineffective boards of directors and audit committees.

The participant added that earlier mandatory internal control reporting would cause further problems.

Auditors are expected to act with integrity in judging whether any information should be excluded from publicly available reports.

Auditors decide whether any information should be excluded from publicly available reports.

Auditors are not expected to act with integrity at any point.

Providing continuing attention to significant findings and recommendations is important to ensure that the benefits of audit work are realized.

It is important to pay attention to significant findings.

Simply performing an audit is sufficient to ensure all potential benefits are realized.

We included IRS and OPM in our review, given IRS' exemption from certain title 5 personnel provisions and OPM's human capital leadership role in the federal government.

IRS and OPM are included in our review.

IRS and OPM are not included in our review.

of the summary to management of the audited entity to verify that the comments are accurately stated.

summaries verify the comments are stated correctly.

summaries verify the comments are stated incorrectly.

Auditors should prepare and maintain audit documentation.

Auditors make the audit documentation.

Reaserchers make the audit documentation.

If specific information comes to the auditors' attention that provides evidence concerning the existence of possible noncompliance that could have a material indirect effect on the financial statements or significant indirect effect on other financial data need to achieve audit objectives, auditors should apply audit procedures specifically directed to ascertaining whether that noncompliance has occurred or is likely to have occurred.

If specific information comes to the auditor's attention that could have a material indirect effect on the financial statements needed to achieve audit objectives, auditors should apply specifically directed audit procedures to ascertain whether or not that noncompliance has occurred or is likely to have occurred.

If an auditor finds information that provides evidence of possible noncompliance the auditor should consider their gut feelings as to whether noncompliance may have occurred or not.

It is an independent body that audits the accounts of all government departments and agencies, as well as a wide range of other public bodies, and reports to Parliament on the economy, efficiency, and effectiveness of government agencies.

The independent body audits a number of government agencies.

The government is audited by internal auditors only.

As I noted earlier, the board and the auditors should have a strategic alignment of interests.

The board and auditors should align their interests to work together.

The board and auditors should align their interests to work independently.

An auditor using this guide to review an acquisition that includes significant software development and has a contract in place should review appendix II for techniques to help identify variances from the agency's cost and schedule estimates.

Appendix II shows ways to identify variances from the group's cost and schedule estimates.

Appendix IV shows ways to identify variances from the group's cost and schedule estimates.

Criteria, one of the elements of a finding, provide a context for understanding the results of the audit.

Make it easy to comprehend the results of the audit.

Do not include any context for the results of the audit.

The statement of compliance with GAGAS refers to all the applicable standards that the auditors should have followed during the audit.

Auditors must follow a set of standards when conducting an audit.

Auditors are put through no regulations in regards to their audits or duties.

In fact, there are more innocent--and more plausible--explanations for the changes in audit rates.

The changes in audit rates have plausible explanations.

The only reasonable explanations for the changes in audit rates indicate malicious intentions.

Auditors can reduce the direct tests of the data if they test the effectiveness of general and application controls over computer-processed data, and these tests support the conclusion that the controls are effective.

Auditors are allowed to reduce direct tests of data if they do test the effectiveness of general and application controls.

Auditors are not allowed to reduce direct tests of data.

In some circumstances, auditors should report fraud and illegal acts directly to parties external to the audited entity.

Sometimes auditors should not report cases of fraud to outside parties.

Auditors should always report fraud, to everyone!

For GAO reports, the job documentation should contain evidence that the evaluation team as a group possessed the skills required and assurance that there were no impediments to impartiality among individual team members.

Job documentation should contain evidence.

Job documentation should not contain evidence.

Auditors should also report the status of uncorrected significant findings and recommendations1 from prior audits that affect the objectives of the current audit.

If the current audit's objectives are affected by uncorrected meaningful findings and recommendations from prior audits, auditors should report the status of those.

Information pertaining to past audits is not to be reported by auditors in involvement with the objectives of the current audit.

Financial audits primarily concern providing reasonable assurance about whether financial statements are presented fairly in all material respects in conformity with generally accepted accounting principles (GAAP),2 or with a comprehensive basis of accounting other than GAAP.

Audits look at if a statement is presented fairly.

Audits don't look at if a statement is presented fairly.

This chapter uses only the term program; however, the concepts presented also apply to audits of organizations, activities, and services.

It only says program but it can also apply to other types of audits.

It's entitled program because that is simply what it is.

Audit objectives can be thought of as questions about the program2 that auditors seek to answer.

Audit objectives can be questions that need to be answered.

Audit objectives can be questions that may never be answered.

Generally accepted government auditing standards make GAO analysts and financial auditors responsible for planning, conducting, and reporting their work in a timely manner without internal or external impairments to the work.

GAO analysts plan and conduct their work with auditing standards.

GAO analysts plan and conduct their work without auditing standards.

As required by generally accepted government auditing standards, GAO will hold an exit conference with agency officials at the end of the data collection and analysis phase to (1) validate the factual accuracy of data gathered and (2) discuss the implications that flow from them.

Government auditing standards call for an exit conference with agency officials.

GAO policy is not to discuss audit results with agency officials.

By using software metric tools an auditor can independently evaluate software development projects by analyzing project budgets, requirements, schedules, and resources, and then confirm or question cost, schedule, and resource estimates.

An auditor can independently evaluate software projects with metrics tools.

Software projects could not be evaluated by an independent audit.

To help ensure that the standards continue to meet the needs of the audit community and the public it serves, the Comptroller General of the United States appointed the Advisory Council on Government Auditing Standards to review the standards and recommend necessary changes.

The Advisory Council is tasked with reviewing the standards and changing them.

The Advisory Council is tasked with eliminating the standards.

The auditor should be aware of the agency's organization and procedures for making a contract award.

Auditors should know the agency's procedures for making a contract world.

Auditors don't need to be acquainted with any procedures.

If specific information comes to the auditors' attention that provides evidence concerning the existence of possible noncompliance that could affect financial data significant to the audit objectives or that could have a material indirect effect on the financial statements, auditors should apply audit procedures specifically directed to ascertaining whether noncompliance has occurred or is likely to have occurred.

Auditors who find meaningful discrepancies or red flags must follow specific procedures to find out if noncompliance is an issue is may have been an issue.

Auditors can ignore information or evidence of noncompliance.

Auditors should submit written reports on the attestation engagement to the appropriate officials of the audited entity and to the appropriate officials of the organizations requiring or arranging for the engagement, including external funding organizations, unless legal restrictions prevent it.

Auditors should submit written reports.

Auditors do not need to submit a written report, as long as the data is compiled into a table.

If officials of the audited organization do not have such a process, auditors may wish to establish their own process.

If a process does not exist, officials can establish their own process.

A process is not recommended.

Further, several participants cautioned that the auditor rotation rules currently being developed by the regulators could further reduce audit quality by resulting in a loss of continuity, experience, and technical knowledge on an audit.

Constantly shifting auditors to new jobs would have an impact on quality.

Auditors served a single account over the lifetime of their career.

The Advisory Council has recognized that GAGAS applicable to the performance audit objectives of effectiveness, economy and efficiency, internal control, and compliance are also applicable to prospective analyses, guidance, or summary information.

The generally accepted government auditing standards have been verified by the Advisory Council to be applicable to various audit objects as well as other key areas of the prospectus.

The Advisory Council has stated that GAGAS cannot be used to audit performance objectives.

6The concept of forensic auditing was recently suggested by the Panel on Audit Effectiveness to improve the likelihood that auditors will detect fraudulent financial reporting (see The Panel on Audit Effectiveness Report and Recommendations, Aug. 31, 2000).

The Panel on Audit Effectiveness suggested that forensic auditing is an idea that would make it more likely for auditors to catch fraudulent financial reporting.

The Panel on Audit Effectiveness Report and Recommendations was published in May of 2001.

Contractual arrangements for GAGAS audits should provide for full and timely access to audit documentation to facilitate reliance by other auditors on the auditors' work, as well as reviews of audit quality control and assurance.

GAGAS audits has contractual arrangements to give access to the documents.

GAGAS audits has contractual arrangements to give access to the documents only to the CEOs.

7.24 In identifying potential sources of data that could be used as audit evidence, auditors should consider the validity and reliability of these data, including data collected by the audited entity, data generated by the auditors, or data provided by third parties, as well as the sufficiency and relevance of the evidence.

Valid and reliable data should be used in auditing procedures.

Data generated by the auditors is forbidden.

The importance of integrity can not be overstated, if the key players don't have integrity, not much else matters.

Integrity is so important that it's the one personal characteristic that matters in key positions.

It's possible to overvalue integrity in this context since brains outmatch integrity as far as what you should look for in key players go.

For RSI, the auditor reviews the data for overall compliance with associated guidance and for consonance with the basic financial statements.

The data for overall compliance with associated guidance and for consonance with the basic financial statements is reviewed by the auditor.

The data for overall compliance with associated guidance and for consonance with the basic financial statements is not reviewed by the auditor.

Depending on the circumstances of the audit, auditors may find it necessary to obtain information on compliance matters from others, such as investigative staff, audit organizations, and officials of government entities that provided assistance to the audited entity, and/or the applicable law enforcement authority.

Auditors may sometimes have to glean information on compliance issues from audit organizations.

Auditors never have to acquire information on compliance matters from audit organizations.

In these situations, auditors should report in the scope section the applicable standard that was not followed, the reasons therefore, and how not following the standard affected the results of the audit.

Auditors should report that the standard wasn't followed.

Auditors should report that the standard was followed.

the particular circumstances of an audit, using the subject agency's requirements.

Using the subject agency's requirements, within the particular circumstances of an audit.

Subject agency's requirements are never used in the particular circumstances of an audit.

evaluators call such a procedure building an audit trail and use procedures similar to indexing and referencing to establish both the construct validity of the measures reported and the convincingness of the causal explanations developed in the case study (Halpern, 1983).

Such a procedure is called building an audit trail.

There is no name for this procedure.

It is designed, among other things, to enhance oversight of public company auditors in light of recent accountability failures.

It is made to enhance oversight and accountability.

It is designed to rule out any chance of accountability.

Auditors should limit their reporting to matters that would not compromise those proceedings, such as information that is already a part of the public record.

Auditors should have a limit to their reporting.

Auditors should not have any limit.

Audit documentation should contain sufficient information to enable an experienced reviewer, who has had no previous connection with the attestation engagement, to ascertain from the audit documentation the evidence that supports the auditors' significant judgments and conclusions.

The documentation needs to be at a high level.

The audit needs to have as little information as possible.

In addition, each chapter identifies specific audit objectives and documentation expected for the major activities at that point in the acquisition process.

Each chapter identifies specific audit objectives.

There are no chapters identifying specific audit objectives.

This guide is intended to help auditors conduct more

Auditors use the guide to conduct more.

The guide is for use by those being audited.

However, if the auditor finds no additional weaknesses, management will receive a good awareness rating, even if controls need to be strengthened.

Management will receive a good awareness rating if there are no additional weaknesses found.

Even if the auditor finds no additional weakness, management will be fired.

Forensic auditing, as explained by the Panel, would require that auditors undertake an attitudinal shift in their degree of skepticism and presume the possibility of dishonesty at various levels of management, including collusion, overriding of controls, and falsification of documents.

The Panel explained forensic auditing that requires that auditors undertake a shift.

The Panel never explained forensic auditing that requires that auditors undertake a shift.