The Single Audit Threshold Is Now $1 Million: What AUD Candidates Must Know

For years, the single most-tested number in the government-audit corner of AUD was $750,000 — the threshold at which a non-federal entity that spends federal money has to undergo a Single Audit. That number is now out of date. The Office of Management and Budget's 2024 revision of the Uniform Guidance (2 CFR Part 200) raised the Single Audit threshold to $1 million. If you memorized $750,000, you memorized what is now a wrong-answer choice.

This article covers exactly what changed, the effective date, the related numbers that moved with it, and why this is a high-probability swap on the current AUD exam.

What changed, and when it took effect

Under the revised Uniform Guidance, a Single Audit is required when a non-federal entity expends $1,000,000 or more in federal awards during its fiscal year, up from $750,000. The revisions are effective for federal awards issued on or after October 1, 2024, and for audit purposes, for fiscal years beginning on or after October 1, 2024. Entities that spend less than $1 million in a fiscal year that begins on or after that date are no longer subject to a Single Audit.

The Single Audit requirement applies to all non-federal entities — state and local governments, nonprofits, Indian tribes, and institutions of higher education — not just government agencies. And the threshold is tested per fiscal year: a $900,000 year does not trigger an audit, while the next year at $1.1 million does.

The other numbers that moved

The threshold did not move alone. The 2024 revision adjusted several related figures, and the AICPA can build a distractor out of any of them.

The major-program coverage rule (and its classic reversal)

Once a Single Audit is required, the auditor uses a risk-based approach to pick major programs for detailed compliance testing. Type A programs are the larger ones — for an entity in the lowest tier, those exceeding the $1,000,000 threshold, with a sliding scale for larger entities. Everything else is Type B.

The coverage rule is one the exam loves to reverse: major-program testing must cover at least 40% of total federal expenditures — reduced to 20% for a low-risk auditee. The intuition that trips people up is that a clean track record earns you less testing, not more. To qualify as a low-risk auditee, an entity generally needs two consecutive years of clean Single Audits, no going-concern doubt, no material weaknesses, and unmodified opinions. If a choice says low-risk auditees need more coverage, it is the trap.

Where the Single Audit sits in the bigger picture

AUD tests three nested levels of audit, and the Single Audit is the outermost. A standard GAAS audit opines on the financial statements. A Government Auditing Standards (Yellow Book) audit adds written reports on internal control over financial reporting and on compliance — required in every Yellow Book engagement, even when no findings exist. A Single Audit adds, on top of that, an opinion on compliance for each major federal program, a report on internal control over compliance, the Schedule of Expenditures of Federal Awards (SEFA), and a schedule of findings and questioned costs, all submitted to the Federal Audit Clearinghouse. Think of it as layers: GAAS at the base, Yellow Book in the middle, Single Audit on top.

Is it already on your exam? Yes.

The AICPA makes a change in federal law or regulation eligible for testing in the calendar quarter beginning six months after its effective date. With an October 1, 2024 effective date, the $1 million threshold has been testable since 2025. The January 2025 CPA exam blueprints also removed references to outdated guidance, so there is no grace period to count on: study the current numbers.

Study this with current numbers

Government auditing, the Yellow Book, and the Single Audit are taught at current-law accuracy — with the $1 million threshold and the 40% / 20% coverage rule — in topic A18: Government Auditing and Compliance of our free AUD study guide. For the full list of what changed across the exam, see our complete guide to CPA exam changes in 2025 and 2026 and the deep dive on the new auditing standards now testable on AUD.