On May 18, 2018, the American Institute of Public Accountants (AICPA) Government Audit Quality Center (GAQC) issued Alert # 360 announcing that the 2018 OMB Compliance Supplement was available for auditors to use.
The 2018 Compliance Supplement is very different from the prior year’s supplement in that the 2018 Compliance Supplement indicates that as auditors we have to use both the 2017 and the 2018 Compliance Supplement. Basically if a particular section is in the 2018 Compliance Supplement then that section of the 2017 Compliance Supplement has been superseded, otherwise we should continue to use the 2017 Compliance Supplement. Think of the new 2018 Compliance Supplement as a list of changes.
Part 1 of the 2018 Compliance Supplement includes very specific statements as a guide of which Supplement to use: “This 2018 Compliance Supplement adds, deletes, and modifies prior Supplement sections as usual. However, it is unlike previous annual updates to the Supplement in that it only modifies sections of the 2017 Supplement that were in need of significant revision. Sections without revisions from the 2017 Supplement were not copied into this 2018 Supplement. Therefore, auditors must to use this 2018 Supplement and the 2017 Supplement together to perform the audit for the periods the 2018 Supplement is effective. This 2018 Supplement is effective for audits of fiscal years beginning after June 30, 2017. The Table of Contents of this 2018 Supplement describes where it adds, deletes, or supersedes sections in the 2017 Supplement. The portions of the 2017 Supplement that were not superseded or deleted, continue to be effective for audits of fiscal years beginning after June 30, 2017.”
The table of contents will be our best guide to determine which Compliance Supplement to use. During the planning stages of the audit, the audit team should communicate and review the 2018 Compliance Supplement to make sure that the correct one is being used.
The complete compliance supplement can be found here.
A very useful resource is the GAQC 2018 Supplement Access Tool. The AICPA has summarized which supplement to use for each section.
Important sections to review of the 2018 Compliance Supplement include Appendix V – List of Changes for the 2018 Compliance Supplement and Appendix VII-A – Other Audit Advisories – Hurricane and National Defense Authorization Act (NDAA) Addendum.
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