Audit and Accounting Guide State and Local Governments March 1, 2018 23574-349 Copyright © 2018 by American Institute of Certified Public Accountants All rights reserved For information about the procedure for requesting permission to make copies of any part of this work, please email copyright@aicpa.org with your request Otherwise, requests should be written and mailed to Permissions Department, 220 Leigh Farm Road, Durham, NC 27707-8110 AAP ISBN 978-1-94830-625-6 iii State and Local Governments Preface (Updated as of March 1, 2018) Prepared by the State and Local Government Audit Guide Revision Task Force About AICPA Guides This AICPA Guide has been developed by the AICPA State and Local Government Audit Guide Revision Task Force (task force) to assist practitioners in performing and reporting on their audit engagements and to assist management in the preparation of their financial statements in conformity with U.S generally accepted accounting principles (GAAP) An AICPA Guide containing auditing guidance related to generally accepted auditing standards (GAAS) is recognized as an interpretive publication as defined in AU-C section 200, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards.1 Interpretive publications are recommendations on the application of GAAS in specific circumstances, including engagements for entities in specialized industries Interpretive publications are issued under the authority of the AICPA Auditing Standards Board (ASB) after all ASB members have been provided an opportunity to consider and comment on whether the proposed interpretive publication is consistent with GAAS The members of the ASB have found the auditing guidance in this guide to be consistent with existing GAAS Although interpretive publications are not auditing standards, AU-C section 200 requires the auditor to consider applicable interpretive publications in planning and performing the audit because interpretive publications are relevant to the proper application of GAAS in specific circumstances If the auditor does not apply the auditing guidance in an applicable interpretive publication, All AU-C sections can be found in AICPA Professional Standards ©2018, AICPA AAG-SLG iv State and Local Governments the auditor should document how the requirements of GAAS were complied within the circumstances addressed by such auditing guidance The ASB is the designated senior committee of the AICPA authorized to speak for the AICPA on all matters related to auditing Conforming changes made to the auditing guidance contained in this guide are approved by the ASB Chair (or his or her designee) and the Director of the AICPA Audit and Attest Standards Staff Updates made to the auditing guidance in this guide exceeding that of conforming changes are issued after all ASB members have been provided an opportunity to consider and comment on whether the guide is consistent with the Statements on Auditing Standards (SASs) Any auditing guidance in a guide appendix or chapter appendix in a guide, or in an exhibit, although not authoritative, is considered an "other auditing publication." In applying such guidance, the auditor should, exercising professional judgment, assess the relevance and appropriateness of such guidance to the circumstances of the audit Although the auditor determines the relevance of other auditing guidance, auditing guidance in a guide appendix or exhibit has been reviewed by the AICPA Audit and Attest Standards staff and the auditor may presume that it is appropriate An AICPA Guide containing attestation guidance is recognized as an interpretive publication as defined in AT-C section 105, Concepts Common to All Attestation Engagements (AICPA, Professional Standards) Interpretive publications are recommendations on the application of Statements on Standards for Attestation Engagements (SSAEs or attestation standards) in specific circumstances, including engagements for entities in specialized industries Interpretive publications are issued under the authority of the ASB The members of the ASB have found the attestation guidance in this guide to be consistent with existing SSAEs A practitioner should be aware of and consider the guidance in this AICPA Guide applicable to his or her attestation engagement If the practitioner does not apply the attestation guidance included in an applicable interpretive publication, the practitioner should document how the requirements of the SSAE were complied within the circumstances addressed by such attestation guidance Any attestation guidance in a guide appendix or chapter appendix in a guide, or in an exhibit, although not authoritative, is considered an "other attestation publication." In applying such guidance, the practitioner should, exercising professional judgment, assess the relevance and appropriateness of such guidance to the circumstances of the engagement Although the practitioner determines the relevance of other attestation guidance, such guidance in a guide appendix or exhibit has been reviewed by the AICPA Audit and Attest Standards staff and the practitioner may presume that it is appropriate The ASB and AICPA Accounting and Review Services Committee (ARSC) are the designated senior committees of the AICPA authorized to speak for the AICPA on all matters related to attestation Conforming changes made to the attestation guidance contained in this guide are approved by the ASB Chair (or his or her designee) and the Director of the AICPA Audit and Attest Standards Staff Updates made to the attestation guidance in this guide exceeding that of conforming changes are issued after all ASB members have been provided an opportunity to consider and comment on whether the guide is consistent with the SSAEs AAG-SLG ©2018, AICPA v State and Local Governments The Financial Reporting Executive Committee (FinREC) is the designated senior committee of the AICPA authorized to speak for the AICPA in the areas of financial accounting and reporting Conforming changes made to the financial accounting and reporting guidance contained in this guide are approved by the FinREC Chair (or his or her designee) Updates made to the financial accounting and reporting guidance in this guide exceeding that of conforming changes are approved by the affirmative vote of at least two-thirds of the members of FinREC This guide does the following: r r r r Identifies certain requirements set forth in GAAP for governmental entities Describes FinREC's understanding of prevalent or sole industry practice concerning certain issues In addition, this guide may indicate that FinREC expresses a preference for the prevalent or sole industry practice, or it may indicate that FinREC expresses a preference for another practice that is not the prevalent or sole industry practice; alternatively, FinREC may express no view on the matter Identifies certain other, but not necessarily all, industry practices concerning certain accounting issues without expressing FinREC's views on them Provides guidance that has been supported by FinREC on the accounting, reporting, or disclosure treatment of transactions or events that are not set forth in GAAP for governmental entities Accounting guidance for governmental entities included in an AICPA Guide, and cleared by GASB, is a source of authoritative GAAP described in category B of the hierarchy of GAAP for state and local governmental entities as defined in GASB Statement No 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments The accounting provisions of this guide that have been cleared by GASB are formatted in orange font for the reader within the text of the guide and are noted in appendix B, "Category B Guidance." AICPA members should be prepared to justify departures from GAAP as discussed in the "Accounting Principles Rule" (ET sec 1.320.001 and 2.320.001).2 AICPA Guides may include certain content presented as "Supplement," "Appendix," or "Exhibit." A supplement is a reproduction, in whole or in part, of authoritative guidance originally issued by a standard setting body (including regulatory bodies) and applicable to entities or engagements within the purview of that standard setter, independent of the authoritative status of the applicable AICPA Guide Both appendixes and exhibits are included for informational purposes and have no authoritative status Purpose and Applicability The AICPA developed this guide to help auditors understand the GAAP applicable to the financial statements of state and local governments and audit and report on those financial statements in accordance with GAAS This guide is designed as a tool for auditors of governmental entities of all sizes The nature, All ET sections can be found in AICPA Professional Standards ©2018, AICPA AAG-SLG vi State and Local Governments timing, and extent of auditing procedures in a particular engagement are matters of professional judgment and will vary depending upon numerous factors, including the size of the entity and its organizational structure and internal control, materiality considerations, the auditor's assessment of risk, and applicable laws, regulations, and provisions of grants and contracts This guide applies to all state and local governments as defined in chapter 1, "Overview and Introduction." Certain other AICPA Guides also apply to audits of certain state and local governments, as discussed in chapter In particular, auditors who perform audits under Government Auditing Standards, the Single Audit Act Amendments of 1996, and Title U.S Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, should refer to the AICPA Audit Guide Government Auditing Standards and Single Audits Limitations and Coverage This guide is designed to provide guidance to auditors who are new to state and local governmental accounting and auditing as well as to auditors experienced in state and local governmental accounting and auditing This guide assumes that the auditor has expertise in accounting and auditing, in general, but not necessarily in the specialized accounting and auditing practices applicable to state and local governments Therefore, the guide concentrates on the accounting standards and auditing procedures that are unique to or significant for those governments This guide also is intended to be useful in providing accounting and financial reporting guidance to preparers of governmental financial statements The guidance presented here is not all inclusive; it is limited to certain matters that warrant special emphasis or that experience has indicated may be useful Although this guide does not incorporate, repeat, or summarize all authoritative pronouncements that apply to state and local governments, it does consider relevant guidance contained in authoritative pronouncements through those indicated in this preface Authoritative pronouncements should be applied based on the effective dates in the pronouncements The AICPA staff will make conforming changes to this guide annually to incorporate relevant guidance in new accounting and auditing pronouncements Users of this guide should consider pronouncements issued after those listed in this preface to consider their effect on state and local governments Recognition 2018 Guide Edition AICPA Senior Committees Auditing Standards Board Michael J Santay, Chair Marcia L Marien, Member Financial Reporting Executive Committee Jim Dolinar, Chair The AICPA gratefully acknowledges John Good for his valuable assistance in updating the 2018 edition of the guide The AICPA also gratefully acknowledges those members of the AICPA State and Local Government Expert Panel who reviewed or otherwise contributed to AAG-SLG ©2018, AICPA vii State and Local Governments the development of this edition of the guide: Corey Arvizu, Joel Black, Stephen Blann, David Bullock, Edward Chait, Sharon Edmundson, Michelle Horaney, Jeff Markert, Tamara Miramontes, Flo Ostrum, Chris Pembrook, Reem Samra, Robert Scott, Kevin Smith, Michelle Watterworth, Walker Wilkerson, and the chair of the Expert Panel, Heather Acker AICPA Staff Shavonn R Pegram Manager Product Management and Development—Public Accounting Laura Hyland Senior Manager Governmental Auditing and Accounting—Public Accounting and Staff Liaison to the AICPA State and Local Government Expert Panel Guidance Considered in This Edition This edition of the guide has been modified by the AICPA staff to include certain changes necessary due to the issuance of authoritative guidance since the guide was originally issued, and other revisions as deemed appropriate Relevant guidance issued through March 1, 2018, has been considered in the development of this edition of the guide However, this guide does not include all audit, accounting, reporting, and other requirements applicable to an entity or a particular engagement This guide is intended to be used in conjunction with all applicable sources of relevant guidance Relevant guidance that is issued and effective on or before March 1, 2018, is incorporated directly in the text of this guide Additionally, authoritative guidance for the following GASB statements are also incorporated directly into the text of this guide: GASB Statement Nos 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions; 85, Omnibus 2017; and 86, Certain Debt Extinguishment Issues (all effective for periods beginning after June 15, 2017) Authoritative guidance for SAS No 133, Auditor Involvement With Exempt Offering Documents (AU-C sec 945), effective for exempt offering documents initially distributed, circulated or submitted on or after June 15, 2018, is also incorporated directly into the text Relevant guidance issued but not yet effective as of the date of the guide and not becoming effective until after June 30, 2018, is referenced in a "guidance update" box; that is, a box that contains summary information on the guidance issued but not yet effective In updating this guide, all guidance issued up to and including the following was considered, but not necessarily incorporated, as determined based on applicability: r r GASB Statement No 87, Leases GASB Interpretation No 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements—an interpretation of NCGA Statements 1, 4, and 5; NCGA Interpretation 8; and GASB Statements No 10, 16, and 18 ©2018, AICPA AAG-SLG viii r r r r r r State and Local Governments GASB Technical Bulletin No 2008-1, Determining the Annual Required Contribution Adjustment for Postemployment Benefits GASB Concepts Statement No 6, Measurement of Elements of Financial Statements GASB Implementation Guide No 2017-3, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (and Certain Issues Related to OPEB Plan Reporting) SAS No 133 Statement of Position 13-2, Performing Agreed-Upon Procedures Engagements That Address the Completeness, Mapping, Consistency, or Structure of XBRL-Formatted Information (AICPA, Professional Standards, AUD sec 55) SSAE No 18, Attestation Standards: Clarification and Recodification (AICPA, Professional Standards) Users of this guide should consider guidance issued subsequent to those items listed previously to determine their effect, if any, on entities covered by this guide In determining the applicability of recently issued guidance, its effective date should also be considered The changes made to this edition of the guide are identified in the Schedule of Changes appendix The changes not include all those that might be considered necessary if the guide were subjected to a comprehensive review and revision GASB standards quoted are from the GASB Statements, Concepts Statements, Interpretations, and Technical Bulletins, ©2017, Financial Accounting Foundation All rights reserved Used by permission Terms Used to Define Professional Requirements in This AICPA Guide Any requirements described in this guide are normally referenced to the applicable standards or regulations from which they are derived Generally, the terms used in this guide describing the professional requirements of the referenced standard setter (for example, the ASB) are the same as those used in the applicable standards or regulations (for example, must or should) Readers should refer to the applicable standards and regulations for more information on the requirements imposed by the use of the various terms used to define professional requirements in the context of the standards and regulations in which they appear Certain exceptions apply to these general rules, particularly in those circumstances when the guide describes prevailing and preferred industry practices for the application of a standard or regulation In these circumstances, the applicable senior committee responsible for reviewing the guide's content believes the guidance contained herein is appropriate for the circumstances Applicability of Quality Control Standards QC section 10, A Firm's System of Quality Control (AICPA, Professional Standards), addresses a CPA firm's responsibilities for its system of quality control for its accounting and auditing practice A system of quality control consists AAG-SLG ©2018, AICPA ix State and Local Governments of policies that a firm establishes and maintains to provide it with reasonable assurance that the firm and its personnel comply with professional standards, as well as applicable legal and regulatory requirements The policies also provide the firm with reasonable assurance that reports issued by the firm are appropriate in the circumstances QC section 10 applies to all CPA firms with respect to engagements in their accounting and auditing practice In paragraph 13 of QC section 10, an accounting and auditing practice is defined as "a practice that performs engagements covered by this section, which are audit, attestation, compilation, review, and any other services for which standards have been promulgated by the AICPA ASB or the ARSC under the " General Standards Rule" (ET sec 1.300.001) or the "Compliance With Standards Rule" (ET sec 1.310.001) of the AICPA Code of Professional Conduct Although standards for other engagements may be promulgated by other AICPA technical committees, engagements performed in accordance with those standards are not encompassed in the definition of an accounting and auditing practice." In addition to the provisions of QC section 10, readers should be aware of other sections within AICPA Professional Standards that address quality control considerations, including the following provisions that address engagement level quality control matters for various types of engagements that an accounting and auditing practice might perform: r r r AU-C section 220, Quality Control for an Engagement Conducted in Accordance With Generally Accepted Auditing Standards AT-C section 105 AR-C section 60, General Principles for Engagements Performed in Accordance With Statements on Standards for Accounting and Review Services (AICPA, Professional Standards) Because of the importance of engagement quality, this guide includes an appendix, "Overview of Statements on Quality Control Standards." This appendix summarizes key aspects of the quality control standard This summarization should be read in conjunction with QC section 10, AU-C section 220, AT-C section 105, and AR-C section 60, as applicable AICPA.org Website The AICPA encourages you to visit its website at aicpa.org, the Governmental Audit Quality Center (GAQC) website at www.aicpa.org/gaqc, and the Financial Reporting Center at www.aicpa.org/frc The "GASB Matters" page on the GAQC website will be of particular interest to auditors of state and local governments The GAQC is a voluntary membership center for CPA firms and state audit organizations designed to improve the quality and value of governmental audits For the purposes of the GAQC, governmental audits are performed under Government Auditing Standards and are audits and attestation engagements of federal, state, or local governments; not-for-profit entities; and certain forprofit organization, such as housing projects and colleges and universities that participate in governmental programs or receive governmental financial assistance The GAQC website provides information and resources to those performing governmental audits The Financial Reporting Center supports members in the execution of highquality financial reporting Whether you are a financial statement preparer ©2018, AICPA AAG-SLG x State and Local Governments or a member in public practice, this center provides exclusive member-only resources for the entire financial reporting process and timely and relevant news, guidance, and examples supporting the financial reporting process Another important focus of the Financial Reporting Center is keeping those in public practice up to date on issues pertaining to preparation, compilation, review, audit, attestation, assurance, and advisory engagements Certain content on the AICPA's websites referenced in this guide may be restricted to AICPA members only Select Recent Developments Significant to This Guide Attestation Clarity Project To address concerns over the clarity, length, and complexity of its standards, the ASB established clarity drafting conventions and undertook a project to redraft all the standards it issues in clarity format The redrafting of SSAEs in SSAE No 18 represents the culmination of that process The attestation standards are developed and issued in the form of SSAEs and are codified into sections SSAE No 18 recodifies the "AT" section numbers designated by SSAE Nos 10–17 using the identifier "AT-C" to differentiate the sections of the clarified attestation standards (AT-C sections) from the attestation standards that are superseded by SSAE No 18 (AT sections) The AT sections in AICPA Professional Standards remain effective through April 2017, by which time substantially all engagements for which the AT sections were still effective are expected to be completed The clarified attestation standards found in AT-C sections are effective for practitioners' reports dated on or after May 1, 2017 AAG-SLG ©2018, AICPA 908 State and Local Governments MARKET—continued Significantly decreased, fair value measurement 2.80–.81 MARKET ACCESS RISK, HEDGING DERIVATIVES 5.111 MARKET APPROACH, FAIR VALUE MEASUREMENT 2.69 MASTER SETTLEMENT AGREEMENT, BETWEEN STATES AND TOBACCO COMPANIES 12.123 MATERIAL CLASSES OF TRANSACTIONS, ACCOUNT BALANCES, AND DISCLOSURES, IDENTIFYING 5.60–.63, Exhibit 5-2 at 5.63 MATERIAL MISSTATEMENT, RISK OF Audit design consideration 4.37–.40, 4.58–.60 Audit risk and auditor’s responsibility 4.03, 4.15, 4.20, 4.22 Budget auditing 11.25 Defined benefit OPEB plan audits 14.50, 14.56–.57, 14.187 Defined benefit pension plan audits 13.46, 13.50, 13.114, 13.124, 13.174 Derivative instruments 5.123, 5.127–.129 Financial significance of components and 4.106 Fraud consideration 4.15, 4.22, 4.93, Appendix A at 4.138 Internal control, understanding 4.51–.57 Investments and investment-related transactions 5.57–.60, 5.62 Net position audits 10.28 Other information 4.137, 16.82–.84 Related party transactions 15.18 Revenues and receivables auditing 6.90, 6.92 Risk assessment 4.58–.64, Appendix A at 4.138 Supplementary information 16.79 Valuation of investments in audit 5.69 MATERIALITY 4.67–.93 Audit reporting 16.04–.11, 16.60–.62 Auditor determinations of 4.71–.87, 14.124, 15.04 Auditor’s responsibility to ascertain 4.71, 15.04–.06 Budget auditing 11.20 Capital asset record audit analysis 7.78 GASB guidance on determining 4.69–.70 Generally 4.03, 4.67–.68 Group audit engagement 4.108–.109 Laws and regulations 4.20 Lesser materiality for particular items 4.79–.80 More detailed levels of 4.86–.87 Performance materiality 4.81–.84, 4.108–.109 AAG-SLG MAR MATERIALITY—continued Planning materiality 4.72–.77 Quantitative and qualitative factors 4.20, 4.78, 15.04–.05 Supplementary information 4.136 Tolerable misstatement 4.85 MATURED LIABILITIES 8.13–.14 MD&A See management discussion and analysis MEASURABILITY, DEFINED 6.12, 6.18 MEASUREMENT FOCUS AND BASIS OF ACCOUNTING (MFBA) Defined benefit OPEB plans 14.103–.110, 14.150–.167, 14.188–.196, Exhibit 14-4 at 14.108, Exhibit 14-5 at 14.193 Defined benefit pension plans 13.96–.102, 13.143–.159 Economic resources See economic resources/accrual MFBA Expenses/expenditures and liabilities 8.02, 8.11–.12 Modified accrual 6.11–.14, 8.02, 8.12, 13.103, 13.160, 14.110 Net positions 10.04, 10.08 Revenues and receivables 6.11–.12 MEDICAID 12.103–.105 MEDICARE REIMBURSEMENTS AND SUBSIDIES 14.96 MFBA See measurement focus and basis of accounting MISAPPROPRIATION OF ASSETS 7.08, Appendix A at 4.138 MISSTATEMENTS, EVALUATING Audit adjustments and 15.02–.06 Auditor’s responsibility 4.15, 4.20, 4.22, 4.93 Interfund, internal, and intra-entity activity 9.32 Materiality determination See also material misstatement; materiality 4.71 Opinion units, applying auditing standards to 15.02 Tolerable misstatement 4.85 MODIFICATION OF OPINION, AUDITOR’S REPORT 16.25–.26, 16.56 MODIFIED ACCRUAL MFBA Defined benefit OPEB plans 14.110, 14.167, 14.196 Defined benefit pension plans 13.103, 13.160 Expenses/expenditures and liabilities 8.12 Revenues and receivables 6.11–.14 MODIFIED APPROACH TO INFRASTRUCTURE ASSETS 7.45–.53, 7.72–.73, 7.83–.91, 16.73, Table 7-1 at 7.11, Table 7-2 at 7.12 MONETARY BUDGETS 11.05 ©2018, AICPA Subject Index MOST ADVANTAGEOUS MARKET 2.65 MSRB See Municipal Securities Rulemaking Board MULTI-PERIOD EXCESS EARNINGS METHODS, FAIR VALUE MEASUREMENT 2.69 MULTIPLE-EMPLOYER OPEB PLANS See entries beginning with agent multiple-employer; entries beginning with cost-sharing multiple-employer MULTIPURPOSE GRANTS 6.72 MULTISTATE LEGAL SETTLEMENTS 12.120–.124 MUNICIPAL SECURITIES OFFERINGS, AUDITOR INVOLVEMENT WITH 18.01–.40 Activities involved in 18.08, 18.10–.20 Attestation engagements related to 18.39–.40 Auditor’s responsibilities 18.21–.27 Conditions establishing 18.08–.09 GAS standards reports and references 18.31 Generally 18.01–.07 Letters for underwriters 18.15, 18.32–.38 Setting limits on references to auditor as "expert" 18.38 Terms of engagement 18.28–.29 MUNICIPAL SECURITIES RULEMAKING BOARD (MSRB) 18.04–.05 N NEGATIVE TRENDS, IN GOING CONCERN CONSIDERATION 15.21 NEGOTIATED SALE OF MUNICIPAL SECURITIES 18.01 NET ASSET VALUE (NAV) PER SHARE, INVESTMENT VALUATION 2.80, 2.85, 5.20–.23, 5.51, 5.91 NET ASSETS See net position NET (EXPENSE) REVENUE/NET COST 2.23 NET INVESTMENT IN CAPITAL ASSETS 10.06 NET OPEB LIABILITY See also total OPEB liability Agent plan 14.104–.106, 14.110, 14.138–.141, 14.147 Cost-sharing plan 14.35–.36, 14.93–.96, 14.162–.166, 14.184–.187 Measurement date in auditing 14.151, 14.154, 14.161, 14.189–.190 Recognitions in OPEB expense 14.107 Single-employer plan 14.35–.36, 14.93–.96, 14.104–.106, 14.110, 14.138–.141, 14.144–.146 ©2018, AICPA 909 NET PENSION LIABILITY See also total pension liability Agent plan 13.32–.33, 13.97–.98, 13.131–.142 Cost-sharing plan 13.30–.31, 13.34–.43, 13.84–.87, 13.144–.149, 13.154–.158 Measurement date in auditing 13.98, 13.104 Recognition in deferred outflow of resources 13.101 Recognition in pension expense 13.99–.100 Single-employer plan 13.30–.31, 13.34–.43, 13.84–.87, 13.97–.98, 13.131–.142 NET POSITION 10.01–.31 Additions distinguished from revenues 6.09 Alternative reporting Appendix A at 2.97 Audit considerations 3.30, 10.25–.31, 13.140, 14.144–.146 Changes in accounting principles and 2.14 Classification system 2.17 Defined 10.02–.03 Defined benefit OPEB plans 14.19–.23, 14.42–.43, 14.144–.147 Defined benefit pension plans 13.18–.27, 13.97, 13.99, 13.140 Derivative instrument valuation 5.114 Endowment classifications 12.77–.78 Expenses/expenditures and liabilities 8.109–.110 Fiduciary fund financial statements 5.39, 6.84, 8.10, 10.22, 13.23–.27, 14.17, 14.24–.28 Financial statement reconciliation 10.19–.21 Government-wide financial statements 2.15–.20, 10.06–.08, 10.19, 10.24, Table 10-1 at 10.07 MFBA 10.04, 10.08 Proprietary fund financial statements 2.38, 10.09 Reporting interfund balances and activities 9.15 Reporting internal balances and activities 9.16 Restricted 2.38, 8.15, 10.06, 10.12 Statement of See statement of net position Statement of changes in fiduciary net position 5.39, 6.84, 8.10, 13.23–.27, 14.17, 14.24–.28 Statement of changes in trust net position 8.107–.108 Statement of revenues and expenses 2.37, 2.39, 8.106 Unrestricted 10.06 NET SETTLEMENT, DERIVATIVE INSTRUMENTS 5.102 NETWORK OF ASSETS 7.19, 7.22, 7.45 NONAPPROPRIATED BUDGETS 11.04 AAG-SLG NON 910 State and Local Governments NONATTEST SERVICES BY AUDITOR, AND INDEPENDENCE 4.123–.124 NONRECIPROCAL INTERFUND ACTIVITY 9.02 NONCOMPLIANCE WITH LAWS AND REGULATIONS AND CONTRACT OBLIGATIONS Auditor’s limitations in recognition of 4.15 Auditor’s responsibilities regarding 4.16–.20 Defined 4.10 Material misstatement resulting in 4.20–.21 NONRECOGNIZED EVENTS 15.32, 15.34, 15.36 NONEMPLOYER CONTRIBUTING ENTITIES See also special funding situations 13.23, 14.24, 14.201 "NOT-FOR-PROFIT" MODEL USE BY GOVERNMENT, ALTERNATIVE REPORTING Appendix A at 2.97 NONEXCHANGE FEES, AS REVENUE 6.41–.42 NOT-FOR-PROFIT PUBLIC COLLEGES AND UNIVERSITIES DISTINGUISHED FROM PRIVATE-SECTOR 12.65 NONEXCHANGE FINANCIAL GUARANTEES 8.89–.90 NONEXCHANGE TRANSACTIONS 6.17–.45 Asset and revenue recognition 6.18, Table 6-1 at 6.18 Audit considerations 4.12 Classes of 6.17 Contributed services as revenue 6.45 Defined 6.04 Donations from nongovernmental entities 6.37–.39 Endowments and similar transactions 6.36 Expenses/expenditures 8.06 Fines 6.40 Generally 2.13, 6.17–.24 Government-mandates See government-mandated nonexchange transactions Imposed nonexchange revenues 6.17–.18, 6.29–.31, 6.40–.42 Income and sales taxes 6.25–.28 Intergovernmental revenues 6.32–.35 Nonexchange fees 6.41–.42 On-behalf payments for fringe benefits and salaries 6.44, 6.88 Pass-through grants 6.43 Property taxes 6.29–.31 Revenue recognition 6.11, 6.14 Voluntary See voluntary nonexchange transactions NONFINANCIAL ASSETS, FAIR VALUE MEASUREMENT 2.67 NONGOVERNMENTAL ENTITIES Component use of private-sector standards 3.37 Donations from 6.37–.39 NONOPERATING EXPENSES, PROPRIETARY FUNDS 8.106 NONOPERATING REVENUES, PROPRIETARY FUNDS 6.81 NONPERFORMANCE RISK, FAIR VALUE MEASUREMENT 2.68 AAG-SLG NON NONSPENDABLE FUND BALANCE 10.11, 10.18, Tables 10-2 to 10-3 at 10.18 NOT-FOR-PROFIT CORPORATIONS, COMPONENT UNIT CONSIDERATIONS 3.16 NOTES TO FINANCIAL STATEMENTS Auditor’s evaluation in accordance with GAAP 15.05 Capital asset disclosures 7.71–.72 Colleges and universities 12.65 Component units 3.23–.25 Defined benefit OPEB plans 14.29–.34, 14.111–.112, 14.168–.169, 14.197–.198 Defined benefit pension plans 13.28–.33, 13.104–.105, 13.161–.162 Equity interests in common stock 5.55 Generally 2.45–.48, 2.91–.92 Nongovernmental standards usage 3.37 Primary government 2.46 Related entities 3.25, 3.29 RSI disclosures See required supplementary information Securities lending transactions 5.55 O OBJECT-LEVEL BUDGET 11.07–.08 OBSERVABLE INPUTS, FAIR VALUE MEASUREMENT 2.76 OFFSHORE PARTNERSHIPS, SUBSTANTIVE AUDIT PROCEDURES FOR 5.97 OI See other information ON-BEHALF PAYMENTS For contributed services 6.45 For fringe benefits and salaries other than pensions or OPEB 6.44, 6.88, 8.28 OPEB AMOUNTS Agent plan 14.106–.109, 14.138–.141, 14.143, 14.148 Allocation to funds, or departments, or both 14.109, 14.166, 14.195 Collective 14.109, 14.151–.157, 14.162–.165, 14.176–.177 Cost-sharing plan 14.35–.47, 14.93–.96, 14.151–.157, 14.184–.187 ©2018, AICPA Subject Index OPEB AMOUNTS—continued Deferred inflows or outflows See deferred inflows of resources; deferred outflows of resources Net OPEB liability See net OPEB liability OPEB expense See OPEB expense Plans not administered through a qualifying trust 14.194–.195, 14.207, 14.212–.218 Single-employer plan 14.35–.47, 14.93–.96, 14.106–.109, 14.138–.142, 14.143–.146, 14.148–.149 OPEB EXPENSE Agent plan 14.106–.108, 14.138–.141, Exhibit 14-4 at 14.108 Components Exhibit 14-4 at 14.108, Exhibit 14-5 at 14.193 Cost-sharing plan 14.158–.160 Plans not administered through a qualifying trust 14.191–.194, 14.200, 14.212–.214, 14.218, Exhibit 14-5 at 14.193 Recognition of net OPEB liability in 14.107 Single-employer plan 14.106–.108, 14.138–.141, Exhibit 14-4 at 14.108 OPEB PLANS See other postemployment benefit (OPEB) plans OPERATING EXPENSES, PROPRIETARY FUNDS 6.80–.81, 8.106 OPERATING FUND 2.33 OPERATING LEASES 8.57–.60 OPERATING REVENUES, PROPRIETARY FUNDS 5.35, 6.80–.81, 6.88 OPERATIONAL ACCOUNTABILITY, DEFINED 2.03 OPERATOR, GOVERNMENTAL, SERVICE CONCESSION ARRANGEMENTS 7.69–.70, 8.29, 8.32 OPINION, AUDITOR’S Adverse opinion See adverse opinion Audit reporting 16.22, 16.97 Component units 16.06 Disclaimer of opinion 16.10, 16.25, 16.29–.31, 16.32–.35, 16.78 Formation of in accordance with GAAP 16.07–.08, 16.10 "In relation to" opinions on budget auditing 11.21 Modification of 16.25–.26, 16.56 Prohibition on unmodified opinion 1.14 Qualified opinion 16.25, 16.28, 16.33, 16.46, 16.77 Special-purpose financial statements 17.17 ©2018, AICPA 911 OPINION UNITS, APPLYING AUDITING STANDARDS TO Audit reporting 16.04–.11, 16.19–.22 Audit strategy 13.47, 14.51 Auditor’s responsibility 4.15, 15.19 Capital asset auditing 7.75–.91 Defined benefit pension plans 13.47, 13.118 Evaluation coverage 4.51 Group audit engagement 4.100–.103, 4.109, Exhibit 4-2 at 4.103 Importance of 4.73–.77 Interfund, internal, and intra-entity activity and balances 9.28, 9.30, 9.32 Material misstatement risk 4.38 Materiality determination 4.73–.78, 4.81–.84 Misstatement judgments 4.51, 4.64, 15.02, Exhibit 4-1 at 4.73 Special-purpose financial statements 17.12–.13 Special-purpose governments 12.09, 12.12, 16.09 ORAL DUE DILIGENCE MEETINGS, MUNICIPAL SECURITIES OFFERINGS 18.16 OTHER INFORMATION (OI) Audit considerations 4.01, 4.129–.130, 4.137 Audit reporting 16.80–.84, 16.86 Auditor’s analysis of 16.63–.64 Budgets 11.01, 11.21 Generally 2.01, 2.54, 2.93 Municipal securities offerings 18.22, 18.30 Special-purpose financial statements 17.06 OTHER-MATTER PARAGRAPH, AUDITOR’S REPORT Defined 16.24 Generally 16.12 "In relation to" reporting on prior-year SI 16.86 Prior-period financial information 16.50–.51 RSI and 16.68–.71 SI and 16.77 Special-purpose financial statement audit 17.15–.17 OTHER POSTEMPLOYMENT BENEFIT (OPEB) PLANS See also defined benefit postemployment benefit other than pensions (OPEB) plans As expense or liability 8.22–.23 Fiduciary fund statement of changes in net position 6.84 Generally 2.21, 2.29 Reporting requirements 12.40–.41 Revenue recognition 6.54 Termination benefits 8.20 AAG-SLG OTH 912 State and Local Governments OUTFLOWS OF RESOURCES See also deferred outflows of resources; expenses/expenditures and liabilities 2.06, 5.29 P PARTICIPATION RATE, DEFINED BENEFIT OPEB PLANS 14.39, 14.95, 14.140 PASS-THROUGH GRANTS 6.43, 8.27 PASSENGER FACILITY CHARGES (PFC) 12.22–.23 PAYMENTS IN LIEU OF TAXES (PILOT) 9.02, 9.35 PERFORMANCE MATERIALITY 4.81–.84, 4.108–.109 PERMANENT ENDOWMENTS 12.77 PERMANENT FUNDS 2.29, 10.30 PERS See public employee retirement system PERSONALLY IDENTIFIABLE INFORMATION (PII) 13.15, 14.16 PFC See passenger facility charges PHAs See public housing authorities PHASE GOVERNMENTS 7.23 PII See personally identifiable information PELL GRANTS 12.68 PILOTs See payments in lieu of taxes PENSION, ITEMS INCLUDED IN See also defined benefit pension plans 13.08 PLAN OF ADJUSTMENT, IN CHAPTER BANKRUPTCY 15.25 PENSION AMOUNTS Agent plan 13.99–.101, 13.107–.108, 13.131–.142 Allocating to funds, or departments, or both 13.102, 13.159 Collective 13.107, 13.143–.150, 13.155–.158, 13.164 Cost-sharing plan 13.34–.43, 13.84–.87, 13.144–.153, 13.157–.158, 13.177–.180 Deferred inflows or outflows See deferred inflows of resources; deferred outflows of resources Net pension liability See net pension liability Pension expense See pension expense Plans not administered through a qualifying trust 13.97, 13.99, 13.100, 13.101, 13.103, 13.131, 13.141, Exhibit 13-4 at 13.101 Single-employer plan 13.34–.43, 13.84–.87, 13.99–.102, 13.107–.108, 13.131–.135, 13.142, Appendix C PLEDGES (PROMISES TO GIVE/PROMISED DONATIONS) See also donations 6.22, 6.37–.39, 6.59, 8.34, 12.65 PENSION EXPENSE Agent plan 13.99–.101, 13.107–.108, 13.131–.134, 13.136, 13.142, Exhibit 13-4 at 13.101 Collective 13.148–.150, 13.157–.158, 13.164 Cost-sharing plan 13.148–.153, 13.157–.158, 13.164, 13.177–.180 Single-employer plan 13.99–.101, 13.107–.108, 13.131–.135, 13.142, Exhibit 13-4 at 13.101 PENSION PLAN OBLIGATIONS See also defined benefit pension plans 8.21, 17.05 POLLUTION REMEDIATION 7.01, 7.44, 7.64, 8.41–.45 POOLED SECURITIES, SECURITIES LENDING TRANSACTIONS 5.46 POPULAR REPORTS 16.93, 16.95–.96 POST-IMPLEMENTATION/OPERATION STAGE OF SOFTWARE DEVELOPMENT 7.57–.58 POSTEMPLOYMENT BENEFIT PLANS Defined benefit pension plans See defined benefit pension plans Defined contribution pension plans 2.51 Generally 2.51, 12.40–.43 OPEB plans See other postemployment benefit (OPEB) plans PERs See public employee retirement system Special-purpose governments 12.40 Termination benefits 8.20, 8.22–.23 Unemployment compensation 12.107 POTENTIAL HEDGING DERIVATIVE INSTRUMENT 5.105, 5.115 PRACTICAL STANDARD, TAX REVENUE RECOGNITION 6.26 PREAUDIT CONFERENCE 4.34 PRECONDITIONS FOR AN AUDIT 4.05 PRELIMINARY PROJECT STAGE OF SOFTWARE DEVELOPMENT 7.57–.58 PREMIUM, FAIR VALUE MEASUREMENT 2.73–.74 PENSION TRUST FUNDS 2.29 PREMIUMS, INSURANCE 14.87–.88 PERFORMANCE BUDGETS 11.05, 11.06 PREPAID ITEMS 8.62–.63 PERFORMANCE (INCENTIVE) FEE, INVESTMENT AGREEMENT 14.92 PRESENT VALUE TECHNIQUES, FAIR VALUE MEASUREMENT 2.69 AAG-SLG OUT ©2018, AICPA Subject Index 913 PRESENTATION OF FINANCIAL STATEMENTS Audit considerations 2.86–.96, 7.75 Auditing net positions 10.25 Budgetary comparison schedules or statements 11.19–.21 Capital assets 7.13–.34, 7.75 Colleges and universities 12.65 Derivative instruments 5.124 Discrete method for component units See discrete presentation method of reporting, component units Expenses/expenditures and liabilities 8.116 Fiduciary fund 2.41–.43, 7.34 Financial reporting entity 3.13–.22, 3.35 Government-wide financial statements 7.13–.30 Governmental funds 7.31–.32 Incomplete financial reporting entity 3.35 Interfund, internal, and intra-entity activity and balances 9.28 Investments and investment-related transactions 5.27–.36 Net position 2.23, 2.38–.39, 10.25 OI See other information Prior-period financial information 2.55–.56, 16.45–.51 Proprietary funds 7.33 Revenues and receivables 6.89 RSI See required supplementary information Sections of Exhibit 2-1 at 2.08 Service concession arrangements 7.66–.70, 7.72 SI See supplementary information Summary of standards 7.10–.12, Table 7-2 at 7.12 PRIMARY GOVERNMENT—continued Notes to financial statements 2.46 Revenue and receivable sources, internal 6.06 PREVIOUSLY INCURRED DISBURSEMENT, EXPENSES RESULTING FROM 8.62–.66 PROGRAM LOANS 12.74 PRICE, FAIR VALUE MEASUREMENT 2.66 PRICING SOURCE, AUDIT CONSIDERATIONS IN INVESTMENTS 5.73–.77, 5.87 PRIMARY GOVERNMENT See also component units Accountability of 3.08 Allocation of plan amounts between primary government and discretely presented component units 14.194, 14.217 Audit reporting 16.10, 16.54–.59 Authority and fiscal responsibility 3.09 Component unit relationship with 3.08–.12 Component units distinguished from 2.11 Defined 3.05–.06 Deposit and investment disclosures 5.53 Financial reporting entity 3.01 Financial statement requirements 4.68 Fiscal-year end distinguished from component units 3.20 Government-wide financial statements 2.11 Intra-entity activity and balances 9.05, 9.21–.26 ©2018, AICPA PRINCIPAL MARKET 2.65 PRIOR-PERIOD COMPARATIVE FINANCIAL INFORMATION 2.55–.56, 16.45–.51, 16.73, 18.24 PRIOR-YEAR FINANCIAL INFORMATION, "IN RELATION TO" REPORTING 16.74, 16.86 PRIVATE EQUITY, SUBSTANTIVE AUDIT PROCEDURES FOR 5.97 PRIVATE PLACEMENT OF MUNICIPAL SECURITIES 18.01 PRIVATE-PURPOSE TRUST FUNDS 2.29, 6.67, 8.67, 12.116 PRIVATE-SECTOR COLLEGES AND UNIVERSITIES DISTINGUISHED FROM PUBLIC NOT-FOR-PROFIT 12.65 PRIZE WINNERS See lotteries PROFESSIONAL SKEPTICISM BY AUDIT EXAMINER 4.19, 4.64, Appendix A at 4.138 PROGRAM AUDITS, STATE GOVERNMENTS 12.102 PROGRAM FINANCIAL STATEMENTS 16.91 PROGRAM-LEVEL BUDGET 11.07–.08 PROGRAM REVENUES 5.34, 6.69–.76, Table 6-2 at 6.70 PROGRAM-SPECIFIC OPERATING AND CAPITAL GRANTS AND CONTRIBUTIONS 6.71 PROJECTION OF BENEFIT PAYMENTS Defined benefit OPEB plans 14.38–.46 Defined benefit pension plans 13.37–.43, 13.155 PROMISES TO GIVE (PLEDGES/PROMISED DONATIONS) See also donations 6.22, 6.37–.39, 6.59, 8.34, 12.65 PROPERTY TAX REVENUES 6.07, 6.29–.31, 6.99 PROPORTIONATE SHARE OF COLLECTIVE NET OPEB LIABILITY, COST-SHARING PLANS 14.151–.157, 14.166 PROPORTIONATE SHARE OF COLLECTIVE NET PENSION LIABILITY, COST-SHARING PLANS 13.144–.147 AAG-SLG PRO 914 State and Local Governments PROPRIETARY FUNDS Aggregation of funds 2.32–.33 Alternative reporting Appendix A at 2.97 Capital assets 7.02, 7.04, 7.11, 7.33, Table 7-2 at 7.12 Debt reporting 8.75, 8.79, 8.83 Expense reporting 6.80–.81, 8.09, 8.10, 8.59, 8.106 Financial statements 2.37–.40 Flexible budgets 11.05 Interfund movements 7.60–.61, 9.10 Intra-entity transfers of assets 7.62 Inventories 8.65 Investments and investment-related transactions 5.35 Landfill closure costs 8.38 Net position in financial statements 2.38, 10.09 Operating lease expenses 8.59 Presentation of financial statements 7.33 Revenues and receivables 5.35, 6.09, 6.79–.83, 6.88 Types 2.29 QUALIFYING TRUST, DEFINED BENEFITS PLANS ADMINISTERED THROUGH See defined benefit pension plans; defined benefit postemployment benefit other than pensions (OPEB) plans "PRUDENT PERSON RULE," COMPLIANCE REQUIREMENTS 5.07 RECOGNIZED EVENTS 15.32–.35 PUBLIC CORPORATION, AS GOVERNMENTAL ENTITY 1.01 PUBLIC EMPLOYEE RETIREMENT SYSTEM (PERS) Audit strategy 13.47, 13.118 Defined 13.02 GASB guidance on 13.17, 14.18, Appendix A at 2.97 Land and buildings owned by 7.34 Special-purpose and state governments 12.40, 12.42 PUBLIC ENTITY RISK POOLS 2.51, 8.52, 8.63, 12.46–.50 PUBLIC HOUSING AUTHORITIES (PHAs) 12.24–.27 PUBLIC TRANSPORTATION SYSTEMS 12.36–.37 PURCHASE OF INSURANCE, HEALTH CARE BENEFITS PAYMENTS 14.87, 14.88, 14.89 PURPOSE RESTRICTIONS ON RESOURCE USAGE 6.19, 6.23 Q QSTP See Qualified State Tuition Program QUALIFIED OPINION Audit reporting 16.25, 16.33, 16.46, 16.77 Auditor’s report scope limitations 16.28 Departures from GAAP 16.33 QUALIFIED STATE TUITION PROGRAM (QSTP) 12.118–.119 AAG-SLG PRO QUASI-ENDOWMENT, DEFINED 12.77 R RATE REGULATION, REVENUE RECOGNITION 6.52 REAL ESTATE Audit considerations for direct investment in 5.96 College endowments 5.18, 7.34, 12.75 Property tax revenues 6.07, 6.29–.31, 6.99 REASONABLE PERIOD OF TIME, DEFINED FOR GOING CONCERN EVALUATION 15.27 RECEIVABLES See revenues and receivables RECIPROCAL INTERFUND ACTIVITY 9.02 RECOGNIZED INDIAN TRIBES 12.90–.94 RECORDKEEPING See documentation RECURRING BENEFIT PAYMENTS 13.80 REFUNDING, DEBT 8.91, 8.95, 8.98–.99 REFUNDING OF TAXES 6.28 REGULATORY AGENCY, FINANCIAL REPORTING IN ACCORDANCE WITH 17.12–.13 REGULATORY BASIS OF ACCOUNTING 17.01, 17.04, 17.15, 17.17 REIMBURSEMENTS 6.20, 9.02, 9.07, 9.11, Table 9-1 at 9.07 RELATED ENTITIES 3.25, 3.29 RELATED-PARTY TRANSACTIONS Audit considerations 4.94 Concluding the audit 15.16–.19 Special-purpose governments 12.32–.33 RELEVANT ASSERTIONS See assertions RENT INCREASES ON OPERATING LEASES, SCHEDULED 8.58–.60 REPLICABLE CONDITION ASSESSMENTS 7.47, 7.88 REPORTING ENTITY, DEFINED 12.101 REPORTING UNITS, MAJOR FUNDS AS 17.03 REQUIRED CHARACTERISTICS OF RECIPIENTS, NONEXCHANGE TRANSACTIONS 6.20 ©2018, AICPA Subject Index REQUIRED SUPPLEMENTARY INFORMATION (RSI) Audit considerations 2.93–.94, 4.25–.26, 4.128–.133 Audit reporting 16.02, 16.12, 16.63–.73, 16.85 Budgetary compliance 11.25 Budgetary reporting 11.01, 11.12–.16, 11.19–.21 Capital assets 7.52–.53, 7.73, 7.91 Colleges and universities 12.65 Defined benefit OPEB plans 12.40, 14.30, 14.32–.34, 14.112, 14.169 Defined benefit pension plans 13.29–.33, 13.105, 13.162 Financial reporting 2.49–.52 Financial reporting entity 3.26 GASB-defined 4.01 Generally 2.01, 2.49–.52, 2.93–.94 Infrastructure assets 7.52–.53 MD&A 2.09–.10, 7.73, 16.73, Exhibit 2-1 at 2.08 Other than MD&A 2.49–.52, Exhibit 2-1 at 2.08 Special funding situations 13.164 Written representations 15.11 RESEARCH GRANTS AND CONTRACTS 12.70 RESERVE FUND, BOND AGREEMENTS REQUIRING 8.78 RESOURCE CONCEPT, AND ELEMENTS OF GOVERNMENTAL FINANCIAL STATEMENTS 2.04, 2.11, 2.13 RESOURCE FLOWS STATEMENTS See also statement of activities Basis of accounting 8.02 Elements of 2.04, 2.06 Expenses/expenditures and liabilities 8.101–.108 Investments and investment-related transactions 5.31–.35 Long-term debt 8.16 Revenues and receivables 6.69–.85, Table 6-2 at 6.70 RESOURCE INFLOWS See inflows of resources RESOURCE OUTFLOWS See outflows of resources RESTORATION COST APPROACH TO IMPAIRED ASSET MEASUREMENT 7.42 RESTRICTED ASSETS 2.38, 2.90, 8.15 RESTRICTED FUND BALANCE 10.12, 10.18, Tables 10-2 to 10-3 at 10.18 RESTRICTED NET POSITION Expense reporting and 8.15 Financial statement reconciliation 10.06, 10.12 Proprietary fund financial statements 2.38 ©2018, AICPA 915 RESTRICTIONS ON FINANCIAL REPORTING, COLLEGES AND UNIVERSITIES 12.65 RETROACTIVE REPORTING OF CAPITAL ASSETS 7.21–.25 REVENUE ANTICIPATION NOTES 8.70, 8.73 REVENUE BONDS 8.74 REVENUES AND RECEIVABLES 6.01–.102 Accounting and financial reporting considerations 6.10–.88 Amounts collected for individuals, other entities, or other funds 6.67–.68 Audit considerations 6.89–.102, Appendix A at 4.138 Blended component reporting 3.18 Capital assets as revenue sources 6.11, 6.12, 6.32, 6.77 Colleges and universities 12.69–.75 Component units 6.06, 12.76 Confidential records 6.101 Confirmations 6.94–.97 Contributed services 6.45 Customer and developer deposits 8.61 Defined benefit OPEB plans 14.20 Defined benefit pension plans 13.19, 13.70–.76 Disclosures 6.86–.88 Endowments 5.34, 6.36 Estimates 6.98–.99 Exchange transactions See exchange transactions Fees as revenue 6.41–.42, 6.48–.52, 6.82, 8.27, 8.61, 12.66 Fiduciary funds 6.09, 6.84–.85 Financial position statement classifications 6.86–.87 Future revenues 6.57–.63, 6.83, 6.88, 8.64, 9.24 General recognition standards 6.11–.16 Generally 6.01–.02 Government-wide statement of activities 6.09, 6.69–.76, 12.76, Table 6-2 at 6.70 Governmental funds 6.09, 6.77–.78 Identifying improper recognition Appendix A at 4.138 Interfund activity See interfund activity and balances Internal activity See internal activity and balances Intra-entity activity See intra-entity activity and balances Investment income See investment income Nature of transactions 6.03–.09 Nonexchange transactions See nonexchange transactions Program revenues 5.34, 6.69–.76, Table 6-2 at 6.70 Proprietary funds 5.35, 6.09, 6.79–.83 AAG-SLG REV 916 State and Local Governments REVENUES AND RECEIVABLES—continued Resource flows statement classifications 6.69–.85, Table 6-2 at 6.70 Sales of receivables and future revenues 6.57–.63, 8.34 Shared revenues 6.34, 8.24–.25 Special assessments 6.64–.66 Special revenue funds 2.29, 10.30 State government programs 12.103–.113 Taxes See taxes Tuition and fees for colleges and universities 12.66 RISK ASSESSMENT—continued Revenues and receivables 6.90, 6.92 Understanding the entity, it environment, and its internal control 4.41–.57, Appendix A at 4.138 REVERSE REPURCHASE AGREEMENTS 5.13, 5.43 ROLLOVER RISK, HEDGING DERIVATIVES 5.111 RISK See also risk assessment Audit risk 4.03, 4.15, 4.20, 4.22, 4.30–.34 Common risk profile 5.61–.63 Credit risk 5.11, 5.110–.111 Decentralized revenue collections 6.03 Derivative instruments 5.101, 5.110–.111, 5.113 Foreign currency risk 5.11, 5.110, 5.111 Group in managing See public entity risk pools Identifying significant risks related to valuation assertion 5.64–.67, Exhibit 5-3 at 5.67 Interest rate risk 5.11, 5.110, 5.111 Investments and investment-related transactions 5.11, 5.53 Material misstatement See material misstatement, risk of Nonperformance, fair value measurement 2.68 Risk management arrangements for defined benefit OPEB plans 14.09–.11 Significant risk, defined 4.61 Valuation risk, disaggregating classes of securities within portfolio based on 5.63, Exhibit 5-2 at 5.63 RSI See required supplementary information RISK ASSESSMENT Assertion categories 4.39–.40 Audit considerations 4.30–.66, Exhibit 14-1 at 14.62, Exhibits 14-2 to 14-3 at 14.65 Audit planning 4.30–.34 Audit strategy 4.35–.38 Capital assets 7.76 Derivative instrument reporting 5.127–.129 Expenses/expenditures and liabilities 8.117, 8.119–.120 Financial statements "as a whole" 4.38 Identifying material classes of transactions, account balances, and disclosures 5.61–.63 Internal audit function 4.65–.66 Investments and investment-related transactions 5.57 Material misstatement risk 4.51–.64, Appendix A at 4.138 Net position audits 10.28 Procedures and related activities 4.43–.46 AAG-SLG REV RISK FINANCING ACTIVITIES Exchange transactions 6.53 Expenses/expenditures and liabilities 8.46–.52 Interfund activity and balances 9.09, 9.15 Revenue recognition issues 6.53 S SALES Capital assets 6.55–.56, Table 7-2 at 7.12 Donated assets 7.32 Future revenues 6.57–.63, 6.83, 8.64, 9.24 Municipal securities process 18.01–.02 Receivables 6.57–.63, 8.34 SALES TAX 6.07, 6.25–.28 SCHEDULE OF PENSION AMOUNTS, ILLUSTRATIVE Appendix C SCHOLARSHIP DISCOUNTS AND ALLOWANCES, COLLEGES AND UNIVERSITIES 12.67 SCHOOL DISTRICTS 12.14–.20 Attendance reporting 12.16 Charter schools 12.20 Child nutrition programs 12.19 Compliance requirements 12.15 Generally 12.14 Postemployment benefit plans 12.43 Student activity funds 12.18 Summer payroll 12.17 SCOPE Audit considerations 4.01, 4.12, 4.25, 4.49, 4.86–.87, 4.113, 16.11 Governmental entity 1.01–.08 Limitations in auditor’s report 16.27–.31 Supplementary information 4.131–.132 SECURITIES ACT OF 1933 (1933 ACT) 18.03, 18.07, 18.32–.33, 18.38 SECURITIES AND EXCHANGE ACT OF 1934 18.03 SECURITIES LENDING TRANSACTIONS 5.14, 5.44–.46, 5.54–.55, 5.98 SEGMENT DISCLOSURES 8.111, 8.126, 12.87 ©2018, AICPA Subject Index SELF-INSURANCE Benefit payments and benefits payable 14.87, 14.88, 14.89 OPEB risk management and administrative arrangements 14.10, 14.86 SEPARATE COMPONENT AUDITOR, FINANCIAL REPORTING ENTITY 3.34 SEPARATE ORGANIZATIONS, AS COMPONENT UNITS 3.10–.12 SERVICE CONCESSION ARRANGEMENTS 7.65–.70, 7.72, 8.29–.33, 9.25 SERVICE ORGANIZATIONS, PROCESSING OF TRANSACTIONS BY 4.56, 5.122, 6.91, 7.89 SERVICE-TYPE SPECIAL ASSESSMENTS 6.64 SERVICE UNITS APPROACH TO IMPAIRED ASSET MEASUREMENT 7.42 SERVICE UTILITY OF A CAPITAL ASSET 7.39, 7.42 SERVICES PROVIDED AND USED 9.02, 9.07, 9.09, 9.35, Table 9-1 at 9.07 SETTLEMENT FACTORS, DERIVATIVE INSTRUMENTS 5.102 SGICs See synthetic guaranteed investment contracts SHARED REVENUES 6.34, 8.24–.25 SHORT-TERM DEBT 8.69, 8.70–.71, 8.111 SI See supplementary information SIGNIFICANT COMPONENTS, IN GROUP AUDIT ENGAGEMENT 4.106 SIGNIFICANT ELEMENTS OF CENSUS DATA, DEFINED 13.50, 13.124, 13.174, 14.54, 14.131 SINGLE AUDIT ACT AMENDMENTS OF 1996 1.05, 4.30 SINGLE AUDIT ACT OF 1984 1.05–.06, 1.18 SINGLE-EMPLOYER DEFINED BENEFIT OPEB PLAN Accounting and financial reporting considerations 14.103–.115 Administration structure distinguished from agent plans 14.119 Audit considerations 14.116–.126 Audit strategy 14.117–.126 Benefit payments and benefits payable 14.85–.89 Census data 14.53–.67, 14.130–.135, 14.142 Contributions and contributions receivable 14.79 Defined 14.08 Fiduciary net position 14.144–.146 ©2018, AICPA 917 SINGLE-EMPLOYER DEFINED BENEFIT OPEB PLAN—continued Financial statement using current financial resources measurement focus and modified accrual basis of accounting 14.110 Financial statements using economic resources measurement focus and accrual basis of accounting (no special funding) 14.103–.109 Governance structure and census data 14.16, 14.98, 14.99–.100 Note disclosures 14.31–.32, 14.111–.112 OPEB amounts 14.35–.47, 14.93–.96, 14.106–.109, 14.138–.146, 14.148–.149 RSI 14.32, 14.112 Special funding situations 14.113–.115, 14.136–.137 SINGLE-EMPLOYER DEFINED BENEFIT PENSION PLAN See also defined benefit pension plans Accounting and financial reporting considerations 13.96–.108 Audit considerations 13.90–.93, 13.109–.142 Audit strategy specific to 13.112, 13.116–.119 Benefit payments and benefits payable 13.77–.80 Census data 13.49–.63, 13.90–.93, 13.123–.128, 13.134–.135 Contributions and contributions receivable 13.70–.76, 13.74 Defined 13.08 Fiduciary net position 13.97, 13.99, 13.137–.139 Financial statements using current financial resources measurement focus and modified accrual basis of accounting 13.103 Financial statements using economic resources MFBA and accrual basis of accounting (no special funding) 13.96–.102 Illustrative schedule of pension amounts Appendix C Note disclosures 13.30–.31, 13.104–.105 Pension amounts 13.34–.43, 13.84–.87, 13.99–.102, 13.107–.108, 13.131–.142 RSI 13.31, 13.105 Special funding situations 13.106–.108, 13.129–.130 SINGLE-PROGRAM GOVERNMENTS, ALTERNATIVE REPORTING Appendix A at 2.97 SNAP See Supplemental Nutrition Assistance Program SOFTWARE COSTS, INTERNAL USE 7.56–.59 AAG-SLG SOF 918 State and Local Governments SPECIAL ASSESSMENTS Capital assets 7.16 As debt 6.66, 8.80–.84 SPECIAL FUNDING SITUATIONS Defined benefit OPEB plans 14.113–.115, 14.136–.137, 14.170–.172, 14.199–.201, 14.210–.211 Defined benefit pension plans 13.106–.108, 13.129–.130, 13.163–.165 SPECIAL ITEMS 6.74, 6.78, 8.103, 8.105, 8.106 SPECIAL-PURPOSE FINANCIAL STATEMENTS 2.53, 2.95, 17.01–.19, Appendix A at 17.18, Appendix B at 17.19 SPECIAL-PURPOSE GOVERNMENTS See also state governments 12.01–.94 Airports 12.21–.23 Audit considerations 4.05, 4.77, 12.03–.04, 12.09–.10, 12.12, 12.27 Audit reporting 16.09, 16.17, 16.34, 16.92 Budgetary requirements 11.02 Colleges and universities See colleges and universities Compliance requirements 12.10, 12.15, 12.63–.64 Defined 1.04, 2.53, 3.06–.07, 12.02 Engaged in single governmental program 12.06 Expenses/expenditures and liabilities 12.84–.85 External investment pools 12.51–.58 Financial reporting requirements 12.04–.09 Financing authorities 12.28–.35 GASB compliance 12.01 Generally 12.01–.03 Hospitals and other health care providers 12.11–.13 Indian tribes 12.90–.94 Internal control 12.63–.64 Postemployment benefit plans 12.40–.45 Public entity risk pools 12.46–.50 Public housing authorities 12.24–.27 School districts 12.14–.20 Supporting information, GASB distinguished from AICPA standards 12.01 Transportation systems 12.36–.37 Utilities 8.61, 12.38–.39 SPECIAL REVENUE FUNDS 2.29, 10.30 SPECIALIST Management’s valuation 5.71–.72 Using work of 4.46, 5.62, 5.120, 5.122, 7.80, 7.89, 14.141 SPECIFIED CONDITIONS APPROACH 7.25, 7.54–.59 SPENDING, BUDGET AMENDMENTS BASED ON 11.24 AAG-SLG SPE SPENDING RATE POLICY FOR ENDOWMENT FUNDS 12.81 SPLIT-INTEREST AGREEMENTS 2.21, 12.82–.83 SPONSORING GOVERNMENT FOR EXTERNAL INVESTMENT POOL 12.56 STABILIZATION FUNDS 10.17, 10.23 STATE GOVERNMENTS, SPECIFIC GUIDANCE 12.95–.124 Budgetary requirements 11.02 Colleges and universities See colleges and universities Escheat property 12.114–.117 Food stamps 12.106 GASB compliance 12.01 Generally 12.95 Group audit engagements 4.111 Lotteries 12.108–.113 Medicaid 12.103–.105 Multistate legal settlements 12.120–.124 Nature and organization of state government 12.96–.99 Reporting entity definition 12.101 Separate fund, departmental, agency, and program audits 12.102 Specialized reporting requirements 12.100 Supporting information, GASB distinguished from AICPA standards 12.01 Tuition programs 12.118–.119 Unemployment compensation benefits 12.107 STATEMENT OF ACTIVITIES Depreciation report 7.29 Expenses/expenditures and liabilities 8.101–.108 Fund financial statements structure 2.12 Generally 2.88 Government-wide financial statements 2.22–.24, 8.101–.108 STATEMENT OF CASH FLOWS Enterprise fund revenue and cash-flow classifications 12.69 Interfund activity and balances 9.11 Proprietary funds 2.37, 2.40, 6.80, 6.81 Research grants and contracts 12.70 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION 5.39, 6.84, 8.10, 13.23–.27, 14.17, 14.24–.28 STATEMENT OF CHANGES IN TRUST NET POSITION 8.107–.108 STATEMENT OF FINANCIAL POSITION Alternative investments 5.80 Classifications 5.27–.30, 8.109–.110 Deferred inflows and outflows of resources 3.18 Elements of 2.04, 2.05, 2.11 Expenses/expenditures and liabilities 8.109–.110 ©2018, AICPA 919 Subject Index STATEMENT OF FINANCIAL POSITION—continued Revenues and receivables 6.86–.87 Tax abatement disclosures 2.47, 6.88, 6.100, 15.12 STATEMENT OF NET POSITION Capital assets 2.15–.20 Defined benefit OPEB plans 14.19–.23 Defined benefit pension plans 13.18–.22, 13.137–.40 Fiduciary fund 2.41–.43, 6.84–.85, 10.22, 13.18–.22, 13.137–.140, 14.17, 14.19–.23, 14.104 Fund financial statements structu re2.12 Government-wide financial statement (GWFS) 2.11, 2.15–.20, 10.06–.08, 10.19, 10.24, Table 10-1 at 10.07 Liabilities 2.15, 2.17–.18 Presentation of financial statement 2.23, 2.38–.39 Proprietary fund financial statement 2.37, 2.38 STATEMENT OF REVENUES AND EXPENSES Changes in fund balances 2.34, 2.36, 6.77–.78, 8.104–.105 Changes in fund net positions 2.37, 2.39, 8.106 SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM (SNAP) 12.106 SUPPLEMENTARY INFORMATION (SI) Agency funds 6.85 Audit considerations 2.93, 4.01, 4.128–.132, 4.134–.136 Audit reporting 16.74–.79, 16.85–.86 Auditor’s inclusion in evaluation 16.63–.64 Budgets 11.01, 11.05, 11.12, 11.21 External investment pool reporting 12.56 "GASB defined" See "GASB defined" supplementary information Generally 2.01, 2.54 Prior-year "in relation to" reporting 16.74, 16.86 Public housing authority Financial Data Schedule 12.26 Required See required supplementary information Special-purpose financial statements 17.06 Subsequent events 15.42 Written representations 15.11 SURETY STANDBY TRUST 8.39 SWAP AGREEMENT 5.116 SYNTHETIC GUARANTEED INVESTMENT CONTRACTS (SGIC) 5.114, 5.119 SYSTEM DEVELOPMENT FEES 6.49, 6.82 STUDENT ACTIVITY FUNDS 12.18 STUDENT LOANS 12.73–.74 T SUBCONTRACTED AUDITORS 4.122, 16.40 TAP FEES 6.49 SUBSEQUENT EVENTS AND SUBSEQUENTLY DISCOVERED FACTS Concluding the audit 15.32–.42 Expenses/expenditures and liabilities 8.111 Group audit engagement 4.119–.121 Municipal securities offerings 18.23, 18.25–.26 Summary financial statements 16.100 Testing investments at fair value 5.68–.69, 5.90, Exhibit 5-4 at 5.69, Exhibit 5-5 at 5.70 TAX ABATEMENT DISCLOSURES 2.47, 6.88, 6.100, 15.12 TAX ANTICIPATION NOTES 8.73 TAX-EXEMPT DEBT 1.01 TAX-INCREMENT BONDS 8.74 SUBSTANTIAL DOUBT CRITERION, GOING CONCERN CONSIDERATION 15.20–.24, 15.27–.28, 15.30–.31, 17.14 TAXES Abatement of 2.47, 6.88, 6.100, 15.12 Audit considerations 4.12 Collectibility concerns 6.08 Derived tax revenues 6.17, 6.25–.28 Estimating 6.27 As general revenue 6.73 Income tax revenues 6.25–.28 Limitations on 4.12 Property tax revenues 6.29–.31, 6.88, 6.99 Refunding of 6.28 Sales tax 6.07, 6.25–.28 UBIT 8.35, 12.89 SUBSTANTIVE PLAN, DEFINED 14.49 TERM ENDOWMENTS 12.77 SUBSYSTEM OF A NETWORK OF ASSETS 7.19, 7.22, 7.45 TERMINATION BENEFITS 8.20 SUBSIDIES, STATE GOVERNMENT GOING CONCERN CONSIDERATION 15.23, 15.29 SUMMARY FINANCIAL INFORMATION, AUDIT REPORTING 16.93–.102 SUMMER PAYROLL, SCHOOL DISTRICTS 12.17 ©2018, AICPA TERMINATION OF HEDGING INSTRUMENT 5.116–.117 TERMINATION RISK 5.111 TERMS OF ENGAGEMENT 4.04–.08, 17.08–.09, 18.28–.29 AAG-SLG TER 920 State and Local Governments TESTING Alternative investments 5.80 Audit strategy for testing investments at fair value 5.68–.69, 5.88–.90, Exhibit 5-4 at 5.69 Of controls in further audit procedures 4.88–.92 THEFT OF CAPITAL ASSETS 7.08 THIRD PARTIES Benefit disbursements made by 14.89 Confidentiality or indemnification agreements 14.86 Fair value measurement from quoted prices 2.80, 2.84 Landfill remediation trustees as 8.39 Management’s use of pricing source from 5.73–.77 OPEB risk management and administrative arrangements 14.10 Student loans from 12.73 THOSE CHARGED WITH GOVERNANCE Auditor communication with 4.06, 4.18, 4.23–.29, 15.07, 15.44–.46, 18.22–.23 Defined 4.23, 15.44 Responsibilities of 4.11–.12 TIME PERIOD APPROACH TO REVENUE RECOGNITION 6.13 TIME PERIODS Auditing net positions 10.25 Capital assets 7.75 Debt defeasance 8.97, 8.99 Debt issuance 8.17 Expenses/expenditures and liabilities 8.24, 8.116 Fair value measurement 2.62 Fiscal-year end, primary government distinguished from component units 3.20 Interfund, internal, and intra-entity activity and balances 9.28 Interfund loans 9.08 Long-term debt payment 8.78 Municipal securities offering comfort letter 18.37 Prior-period comparative financial information 2.55–.56, 16.45–.51 Prior-year financial information, "in relation to" reporting 16.74, 16.86 Revenues and receivables 6.88–.89 Stipulations on resource usage 6.19, 6.21, 6.23 Year-to-year changes in major funds 16.52 TIMING AND FREQUENCY OF ACTUARIAL VALUATION Defined benefit OPEB plans 14.37, 14.105, 14.163 Defined benefit pension plans 13.36, 13.98, 13.156 TOBACCO SETTLEMENT AUTHORITY (TSA) 12.28, 12.120–.124 AAG-SLG TES TOBACCO SETTLEMENT RESOURCE (TSR) 12.121–.123 TOLERABLE MISSTATEMENT 4.85 TOTAL OPEB LIABILITY See also net OPEB liability Actuarial valuation and 14.141 Agent plan 14.93–.96, 14.138–.139, 14.141 Alternative measurement method for 14.47, 14.70, 14.104 Audit considerations 14.212–.218 Cost-sharing plan 14.93–.96, 14.162–.165 Measurement of 14.35–.36 Plans not administered through a qualifying trust 14.189–.190, 14.192, 14.196, 14.212–.214, 14.215–.216 Single-employer plan 14.138–.139, 14.141 TOTAL PENSION LIABILITY See also net pension liability Agent plan 13.97–.99, 13.131–.136 Cost-sharing plan 13.30–.31, 13.34–.36, 13.84–.87, 13.155–.157 Measurement date in auditing 13.98 Recognition in pension expense 13.99–.100 Single-employer plan 13.30–.31, 13.34–.36, 13.84–.87, 13.97–.99, 13.131–.136 TOTAL RETURN APPROACH TO ENDOWMENT FUNDS 12.80 TRADE DATE ACCOUNTING FOR INVESTMENTS 5.19 TRANSACTION COST, FAIR VALUE MEASUREMENT 2.66 TRANSACTIONS, ORDERLY, FAIR VALUE 2.80, 2.82–.83 TRANSFEROR, GOVERNMENTAL, SERVICE CONCESSION ARRANGEMENTS 7.66–.68, 8.29–.30 TRANSFERS Excess pension plan assets 14.12 Interfund See interfund transfers Intra-entity activity and balances 7.62, 8.34, 9.24–.26 Service concession arrangements 7.66–.68, 7.72 TRANSPORTATION COST, FAIR VALUE MEASUREMENT 2.66 TRANSPORTATION SYSTEMS 12.36–.37 TRUE ENDOWMENTS 12.77 TRUST FUNDS AND AGREEMENTS Agency funds distinguished from 2.31 Endowments issue 12.78–.79 Expense (deduction) reporting 8.10, 8.107–.108 Investment trust funds 2.29 IRC Section 457 as 8.19 Liabilities 8.110 ©2018, AICPA 921 Subject Index TRUST FUNDS AND AGREEMENTS—continued Long-term debt reporting 8.75 Operating lease expenses 8.59 Pension trust funds 2.29 Private-purpose trust funds 2.29, 6.67, 8.67, 12.116 Surety standby trust 8.39 TRUSTS, DEFINED BENEFIT PLANS ADMINISTERED THROUGH See defined benefit pension plans; defined benefit postemployment benefit other than pensions (OPEB) plans TSA See Tobacco Settlement Authority TSR See tobacco settlement resource TUITION AND FEES, COLLEGES AND UNIVERSITIES 12.66 TUITION PROGRAMS, STATE 12.118–.119 U UBIT See unrelated business income tax UNASSIGNED FUND BALANCE 10.15, 10.18, Tables 10-2 to 10-3 at 10.18 UNCOLLECTIBLE REVENUES 6.15, 6.86 UNDERLYING EVENT STANDARD 6.26, 6.74 UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT, INCLUDING ITS INTERNAL CONTROL 4.41–.66 Analytical procedures 4.43–.45 Audit team, discussion among 4.46 Generally 4.41–.42, 4.47 Government 4.48–.50 Governmental industry 4.48–.49 Internal audit function 4.65–.66 Internal control See also internal control 4.51–.57 Net position audits 10.29 Risk assessment procedures 4.41–.57, Appendix A at 4.138 Special-purpose financial statements 17.11 UNDERWRITERS OF MUNICIPAL SECURITIES, AUDITOR ACTIVITIES IN SUPPORT OF 18.15–.16, 18.32–.38 UNEMPLOYMENT COMPENSATION BENEFIT PLANS 12.107 UNIFORM FINANCIAL REPORTING STANDARDS (HUD) 12.26 UNIFORM MANAGEMENT OF INSTITUTIONAL FUNDS ACT 12.79 UNIVERSITIES See colleges and universities UNMODIFIED OPINION Audit reporting 16.22, 16.97 Component units 16.06 Prohibition 1.14 UNOBSERVABLE INPUTS, FAIR VALUE MEASUREMENT 2.76 UNRELATED BUSINESS INCOME TAX (UBIT) 8.35, 12.89 UNRESTRICTED NET POSITION 10.06 UNUSUAL IN NATURE, SPECIAL ITEMS AS 6.74, 6.88, 8.103 U.S DEPARTMENT OF AGRICULTURE (USDA) 12.19 U.S DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (HUD) 12.24, 12.26–.27 U.S FEDERAL AVIATION ADMINISTRATION (FAA) 12.21–.22 USEFUL LIVES OF ASSETS 7.24, 7.27–.28, 7.39, 7.72, 7.82–.83, Table 7-2 at 7.12 USER AUDITOR 5.122 USER FEES 6.48–.52 UTILITIES, SPECIAL-PURPOSE GOVERNMENTS 8.61, 12.38–.39 V VALUATION See also fair value Actuarial See actuarial valuation Alternative investments 5.78–.81 Audit considerations 5.56, 5.85–.88, Exhibit 5-3 at 5.67 Fair value measurement techniques See also fair value 2.69–.79 Identifying significant risks related to 5.64–.67 Investment disclosure 5.50–.52 Investments at other than fair value 5.18, 5.24–.26, Exhibit 5-1 at 5.18 Management’s use of third-party pricing source 5.73–.77 VALUATION RISK, DISAGGREGATING CLASSES OF SECURITIES WITHIN PORTFOLIO BASED ON 5.63, Exhibit 5-2 at 5.63 UNIFORM PRUDENT MANAGEMENT OF INSTITUTIONAL FUNDS ACT 12.79 VARIABLE-RATE DEBT 8.111 UNIT OF ACCOUNT, FAIR VALUE MEASUREMENT 2.64 VARIABLE RATE DEMAND OBLIGATION (VRDO) 18.04 ©2018, AICPA AAG-SLG VAR 922 State and Local Governments VENTURE CAPITAL FUNDS, SUBSTANTIVE AUDIT PROCEDURES FOR 5.97 VOLUNTARY NONEXCHANGE TRANSACTIONS Defined 6.17 Donations 6.37–.39 Endowments 6.36 Grants, entitlements and shared revenues 8.24 Intergovernmental revenue recognition 6.32–.35 Program-specific operating and capital grants and contributions 6.71 Revenue recognition eligibility 6.20–.21, Table 6-1 at 6.18 VRDO See variable rate demand obligation AAG-SLG VEN W WORKS OF ART, HISTORICAL TREASURES, AND SIMILAR ASSETS Alternative reporting Appendix A at 2.97 As capital assets 6.36, 7.08, 7.26, Table 7-2 at 7.12 Endowments 6.36 WRITTEN REPRESENTATIONS, AUDITING 15.07, 15.09–.15 Y YEAR-END DATES, DIFFERING, EFFECT ON INTERNAL ACTIVITIES 9.27 YEAR-TO-YEAR CHANGES IN MAJOR FUNDS 16.52 ©2018, AICPA ... guidance to auditors who are new to state and local governmental accounting and auditing as well as to auditors experienced in state and local governmental accounting and auditing This guide assumes... Pronouncements and Other Technical Guidance Subject Index 2018, AICPA Contents Overview and Introduction Chapter Overview and Introduction Scope and Purpose Audit and Accounting Guide: State and Local Governments. .. the Audit Risk Alert Government Auditing Standards and Single Audit Developments as a complement to the Audit Guide Government Auditing Standards and Single Audits, Audit Risk Alert General Accounting