Government Auditing and Compliance
Government auditing and compliance show up on roughly 8-12% of AUD exam questions, and the Single Audit threshold is the single most-tested detail. The favorite bait is an outdated threshold: it was $500,000 under OMB Circular A-133, then $750,000 under the 2015 Uniform Guidance, and the 2024 revision raised it to $1,000,000 for fiscal years beginning on or after October 1, 2024. A detail candidates miss: under Government Auditing Standards (Yellow Book), the auditor must issue a written report on internal control over financial reporting and on compliance with laws and regulations in every Yellow Book audit, even when no deficiencies turn up -- on top of the standard GAAS report. Also know that major program selection uses a risk-based approach with Type A/Type B classifications and a minimum 40% coverage requirement (reduced to 20% for low-risk auditees).
What AICPA wants you to know
- 1Understand the Government Auditing Standards (Yellow Book) requirements
- 2Explain the Single Audit under the Uniform Guidance
- 3Identify when a Single Audit is required
- 4Distinguish between a compliance audit and a financial statement audit
- 5Recognize the additional reporting requirements for government audits
Patterns in this topic
The exam re-skins the same archetypes. Recognize these here, then drill them in the Pattern Lab.
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