Title Details

Founded in 1887, the American Institute of Certified Public Accountants (AICPA) represents the CPA and accounting profession nationally and globally regarding rule-making and standard-setting, and serves as an advocate before legislative bodies, public interest groups and other professional organizations. The AICPA develops standards for audits of private companies and other services by CPAs; provides educational guidance materials to its members; develops and grades the Uniform CPA Examination; and monitors and enforces compliance with the accounting profession's technical and ethical standards.
The AICPA's founding established accountancy as a profession distinguished by rigorous educational requirements, high professional standards, a strict code of professional ethics, a licensing status and a commitment to serving the public interest.

Chapter 1: Overview and Introduction 01-24

Scope and Purpose 01-08

GAAP for State and Local Governments 09-14

Applicable Auditing Standards and Requirements 15-20

Guidance in Other AICPA Audit and Accounting Guides and Statements of Position 21-22

Other Sources of Guidance 23

Organization of This Guide 24

Chapter 2: Financial Reporting 01-97

Introduction and Overview 01-06

Historical Perspective 02-06

Governmental Financial Statements 07-53

Management’s Discussion and Analysis 09-10

Government-Wide Financial Statements 11-25

Fund Financial Statements 26-44

Notes to the Financial Statements 45-48

Required Supplementary Information Other Than MD&A 49-52

Special-Purpose Governments 53

Other Financial Reporting Issues 54-59

Other Information and Supplementary Information 54

Prior-Period Comparative Financial Information 55-56

Government Combinations and Disposals of Government Operations 57-59

Fair Value Measurement 60-85

General Principles of Fair Value 61-68

Valuation Techniques 69-71

Inputs to Valuation Techniques 72-75

Fair Value Hierarchy 76-79

Guidance for Fair Value Measurement in Special Circumstances 80-85

Auditing Considerations 86-96

Compliance Requirements 87

Fund and Activity Classifications 88

Major Funds 89

Restricted Assets 90

Notes to the Financial Statements 91-92

Required Supplementary Information, Supplementary Information, and Other Information 93-94

Other Financial Reporting Considerations 95

Accounting and Financial Reporting Alternatives 96

Appendix A—Accounting and Financial Reporting Alternatives in GASB Statement No 34, as Amended 97

Chapter 3: The Financial Reporting Entity 01-39

Introduction 01-03

GASB’s Financial Reporting Entity Standards 04-29

Definition of the Financial Reporting Entity 05-12

Financial Statement Presentation 13-22

Disclosures 23-25

Other Financial Reporting Requirements 26-29

Auditing Considerations 30-39

Reporting Entity 30

Internal Control Over Financial Reporting 31

Audit Procedures  32-33

Separate Component Unit Auditor  34

Presentation of Less Than a Complete Financial Reporting Entity 35

Departures of Component Unit Information From GAAP 36

Nongovernmental Component Unit Use of Private-Sector Standards 37

Changes in the Financial Reporting Entity 38

Other Component Unit Auditing Considerations 39

Chapter 4: General Auditing Considerations 01- 138

Introduction 01- 02

General Principles and Responsibilities  03- 29

Overall Objectives  03

Terms of Engagement  04- 08

Laws and Regulations  09- 22

Auditor’s Communication With Those Charged With Governance  23- 27

Communicating Internal Control Related Matters 28- 29

Auditor’s Risk Assessment and Response to Assessed Audit Risk 30- 66

Planning an Audit 30- 34

Audit Strategy 35- 40

Understanding the Entity, Its Environment, and Its Internal Control 41- 66

Materiality in Planning and Performing an Audit 67- 93

GASB Guidance to Preparers on Materiality Determinations 69- 70

Auditor Materiality Determinations 71- 87

Performing Further Audit Procedures  88- 93

Related Parties and Transactions 94

Group Audit Engagements 95- 121

Other Audit Considerations 122-127

Subcontracting Arrangements 122

Independence Requirements 123-127

Required Supplementary Information, Supplementary Information, and Other Information 128-137

Audit Scope Includes Required Supplementary Information or Supplementary Information 131-132

Required Supplementary Information 133

Supplementary Information 134-136

Other Information 137

Appendix A—Consideration of Fraud in a Financial Statement Audit 138

Chapter 5: Investments, Certain Equity Interests, and Derivatives 01-131

Part I—Accounting, Financial Reporting, and Auditing Considerations for Investments and Certain Equity Interests 04-05

Nature of Transactions 06-17

Compliance Requirements and Deposit and Investment Policies 06-10

Deposit and Investment Risk 11

Internal Investment Pools12

Reverse Repurchase Agreements 13

Securities Lending Transactions 14

Investment Arrangements, Including External Investment Pools 15-17

Accounting and Financial Reporting Considerations 18-55

General Recognition Standards  18-55

Auditing Considerations for Investments and Certain Equity Investments 56-99

Risk Assessment 57

Overall Considerations Relating to Investments and Certain Equity Interests 58-59

Identification of Material Classes of Transactions, Account Balances, and Disclosures 60-63

Identification of Significant Risks Related to Valuation64-67

Determining Audit Strategy for Testing Investments at Fair Value 68-70

Management’s Specialist and the Use of Others in Fair Value Measurement 71-99

Part II—Accounting, Financial Reporting, and Auditing Considerations for Derivative Instruments 100

Nature of Transactions 100-113

Accounting and Financial Reporting Considerations—Derivative Instruments 114-120

Auditing Considerations—Derivative Instruments 121-131

Chapter 6: Revenues and Receivables 01-102

Introduction 01-02

Nature of Transactions 03-09

Accounting and Financial Reporting Considerations 10-88

Accounting 11-68

Resource Flows Statement Classifications 69-85

Financial Position Statement Classifications 86-87

Disclosures 88

Auditing Considerations 89-102

Confirmations 94-97

Estimates 98-99

Tax Abatement Disclosures 100

Confidential Records 101

Other Auditing Procedures 102

Chapter 7: Capital Assets 01-91

Nature of Transactions 01-09

Capital Asset Management 03-08

Compliance Considerations 09

Accounting and Financial Reporting Considerations 10-74

Accounting and Financial Statement Presentation—Government-Wide Financial Statements 13-30

Accounting and Financial Statement Presentation—Governmental Funds 31-32

Accounting and Financial Statement Presentation—Proprietary Funds 33

Accounting and Financial Statement Presentation—Fiduciary Funds 34

Capital Leases 35-38

Capital Asset Impairment 39-44

Modified Approach for Infrastructure Assets 45-53

Specified Conditions Approach for Internally Generated Intangible Assets—Other Than Computer Software 54-55

Specified Conditions Approach for Internally Generated Computer Software 56-59

Interfund Movements and Intra-Entity Transfers of Capital Assets 60-62

Capital Assets Used in Landfills 63

Capital Assets Used in Pollution Remediation 64

Service Concession Arrangements  65-70

Disclosures 71-72

Management’s Discussion and Analysis 73-74

Auditing Considerations 75-91

Capital Asset Records 78-80

Ownership of Infrastructure Assets 81

Useful Lives of Infrastructure Assets 82

Modified Approach for Infrastructure Assets 83-91

Chapter 8: Expenses or Expenditures and Liabilities  01- 126

Introduction 01

Nature of Transactions 02- 10

Accounting and Financial Reporting Considerations 11- 114

General Recognition Standards 11- 17

Specific Recognition and Financial Reporting Standards 18- 60

Expenses Resulting From Previously Incurred Disbursements 61- 65

Liabilities 66- 99

Resource Flows Statement Classifications 100- 107

Financial Position Statement Classifications 108- 109

Disclosures   110- 112

Management’s Discussion and Analysis 113- 114

Auditing Considerations 115- 126

Chapter 9: Interfund, Internal, and Intra-Entity Activity and Balances 01-35

Introduction 01

Nature of Transactions 02-05

Nature of Interfund Activity and Balances 02-03

Nature of Internal Activity and Balances 04

Nature of Intra-Entity Activity and Balances 05

Accounting and Financial Reporting Considerations 06-35

Reporting Interfund Activity and Balances 06-15

Reporting Internal Balances and Activity 16-20

Reporting Intra-Entity Activity and Balances 21-26

Differing Year Ends 27

Auditing Considerations 28-35

Chapter 10: Net Position and Financial Statement Reconciliations  01- 31

Nature of Transactions 01- 04

Financial Reporting Considerations 05- 24

Government-Wide Net Position 06- 08

Proprietary Fund Net Position 09

Governmental Fund Balances 10- 18

Reconciliations—Net Position and Changes in Net Position 19- 21

Fiduciary Fund Net Position 22

Disclosures 23- 24

Auditing Considerations 25- 31

Chapter 11: The Budget 01- 26

Introduction 01- 03

Budgetary Processes 04- 11

Types of Budgets 04- 06

Legal Level of Budgetary Control 07- 08

Encumbrances 09- 10

Budgetary Basis 11

Financial Reporting Considerations 12- 16

Budgetary Comparison Schedules or Statements 12- 13

Disclosures 14- 16

Auditing Considerations 17- 26

Internal Control Considerations 18

Presentation of Budgetary Comparison Information 19- 21

Audit Support for Financial Statement Assertions 22- 24

Budgetary Compliance Considerations 25- 26

Chapter 12: Special-Purpose and State Governments 01- 124

Introduction 01- 03

Financial Reporting Requirements for Special-Purpose Governments 04- 09

Compliance Requirements 10

Specific Guidance for Special-Purpose Governments 11- 89

Hospitals and Other Health Care Providers 11- 13

School Districts 14- 20

Airports 21- 23

Public Housing Authorities 24- 27

Financing Authorities 28- 35

Transportation Systems 36- 37

Utilities 38- 39

Postemployment Benefit Plans 40- 45

Public Entity Risk Pools 46- 50

External Investment Pools 51- 58

Colleges and Universities 59- 89

Specific Guidance for Indian Tribes 90- 94

Specific Guidance for State Governments 95- 124

Nature and Organization of State Governments 96- 99

Specialized Reporting Requirements 100

Reporting Entity Definition 101

Separate Fund, Departmental, Agency, and Program Audits 102

Medicaid 103- 105

Food Stamps 106

Unemployment Compensation Benefit Plans 107

Lotteries 108- 113

Escheat Property 114- 117

State Tuition Programs 118- 119

Multistate Legal Settlements, Including Tobacco Settlement Resources 120-124

Chapter 13: Defined Benefit Pension Plans (Plan & Employer Considerations) 01- 183

Introduction 01- 06

Nature of Transactions 07- 15

Types of Defined Benefit Pension Plans 07- 08

Number of Defined Benefit Pension Plans 09- 10

Relevance of Census Data 11- 15

Part I—Plan Accounting, Financial Reporting, and Auditing Considerations for Defined Benefit Pension Plans Administered Through a Qualifying Trust 16- 95

Accounting and Financial Reporting Considerations 16- 43

Auditing Considerations for the Pension Plan 44- 95

Part II—Employer Accounting, Financial Reporting, and Auditing Considerations: Single and Agent Employers 96- 142

Accounting and Financial Reporting Considerations 96- 108

Auditing Considerations for Single and Agent Employers 109- 142

Part III—Employer Accounting, Financial Reporting, and Auditing Considerations: Cost-Sharing Employers 143- 180

Accounting and Financial Reporting Considerations 143- 165

Auditing Considerations for Cost-Sharing Employers 166- 180

Appendix A—Governmental Employer Participation in Agent Multiple-Employer Plans: Issues Related to Information for Employer Reporting 181

Appendix B—Governmental Employer Participation in Cost-Sharing Multiple-Employer Plans: Issues Related to Information for Employer Reporting 182

Appendix C—Governmental Employer Participation in Single-Employer Plans: Illustrative Schedule of Pension Amounts and Illustrative Auditor’s Report 183

Chapter 14: Defined Benefit Postemployment Benefits Other Than Pensions (Plan & Employer Considerations) 01- 218

Introduction 01- 05

Nature of Transactions 06- 16

Types of Defined Benefit OPEB Plans 06- 08

OPEB Financing (Risk Management) and Administrative Arrangements 09- 11

Number of Defined Benefit OPEB Plans—OPEB Plans Administered Through a Qualifying Trust 12- 13

Relevance of Census Data 14- 16

Part I—Plan Accounting, Financial Reporting, and Auditing Considerations for Defined Benefit OPEB Plans Administered Through a Qualifying Trust 17- 102

Accounting and Financial Reporting Considerations 17- 47

(Plan & Employer Considerations)—Auditing Considerations for OPEB Plans Administered Through a Qualifying Trust 48- 102

Part II—Employer Accounting, Financial Reporting, and Auditing Considerations for Defined Benefit OPEB Plans Administered Through a Qualifying Trust: Single and Agent Employers 103- 149

Accounting and Financial Reporting Considerations 103- 115

Auditing Considerations for Single and Agent Employers Administered Through a Qualifying Trust 116- 149

Part III—Employer Accounting, Financial Reporting, and Auditing Considerations for Defined Benefit OPEB Plans Administered Through a Qualifying Trust: Cost-Sharing Employers 150- 187

Accounting and Financial Reporting Considerations 150- 172

Auditing Considerations for Cost-Sharing Employers 173- 187

Part IV—Employer Accounting, Financial Reporting, and Auditing Considerations for Defined Benefit OPEB Plans That Are Not Administered Through a Qualifying Trust 188- 218

Accounting and Financial Reporting Considerations 188- 201

Auditing Considerations for Employers When the Plan Is Not Administered Through a Qualifying Trust 202- 218

Chapter 15: Concluding the Audit 01- 50

Introduction 01

Misstatements and Audit Adjustments 02- 07

Litigation, Claims, and Assessments 08- 10

Written Representations 11- 15

Related-Party Transactions 16- 19

Going Concern Considerations 20- 31

Subsequent Events 32- 42

Analytical Procedures 43

Communicating With Those Charged With Governance 44- 46

Audit Documentation 47- 50

Chapter 16: Audit Reporting  01- 103

Introduction 01- 03

Materiality 04- 11

Specific Issues in Reporting on the Audits of Governmental Financial Statements 12- 62

Basic Financial Statements 12

The Auditor’s Report 13- 35

Special Situations 36- 62

Required Supplementary Information, Supplementary Information, and Other Information 63- 86

Audit Scope Includes Required Supplementary Information, Supplementary Information, or Other Information 65

Audit Reporting—Required Supplementary Information 66- 73

Supplementary Information 74- 79

Other Information 80- 86

Other Financial Presentations 87- 102

Individual Fund Financial Statements 87- 90

Departmental, Agency, and Program Financial Statements 91

Special-Purpose Regulatory Presentations 92

Summary Financial Information 93- 102

Appendix A—Illustrative Auditor’s Reports 103

Chapter 17: Financial Statements Prepared in Accordance With a Special-Purpose Framework 01- 19

Accounting and Financial Reporting Considerations 01- 06

Auditing Considerations 07- 17

Auditor’s Reports 15- 17

Appendix A—Illustrative Auditor’s Reports 18

Appendix B—Overview of Reporting Requirements for Special-Purpose Financial Statements 19

Chapter 18: Auditor Involvement With Municipal Securities Filings 01- 40

Introduction 01- 06

Auditor Involvement With Municipal Securities Offerings 07- 30

Conditions Affecting Auditor Involvement 08- 20

Auditor Responsibilities When Involved in an Official Statement  21- 27

Engagement Terms Regarding Auditor Involvement 28- 29

Continuing Disclosure Documents  30

Using Government Auditing Standards Reports and References in the Official Statement 31

Letters for Underwriters and Other Requesting Parties 32- 38

References to the Auditor as an "Expert" 38

Attestation Engagements Related to Municipal Securities Issuances  39- 40

Supplement Statement of Position 98-2

Appendix

A Acronyms and Abbreviations

B Category B Guidance

C Overview of Statements on Quality Control Standards

D Schedule of Changes Made to the Text From the Previous Edition

Index of Pronouncements andOther TechnicalGuidance

Subject Index