Wiley Practitioner's Guide to GAAS 2020

47AU-C 935 Compliance Audits

Scope

Definitions of Terms

Objectives of AU-C Section 935

Requirements

Application of AU-C Sections to a Compliance Audit

Sources of Information Regarding Compliance Requirements

Suggested Audit Procedures

Management’s Responsibilities

The Compliance Audit Process Flow

Material Noncompliance Risks

Reporting Requirements

Documentation

Reissuance of the Compliance Report

AU-C 935 Illustrations

Illustration 1. AU-C Sections That Are Not Applicable to Compliance Audits

Illustration 2. Illustrative Combined Report on Compliance with Applicable Requirements and Internal Control over Compliance (Unmodified Opinion on Compliance; No Material Weaknesses or Significant Deficiencies in Internal Control over Compliance Identified) (Source: AU-C 935.A42)58

SCOPE

AU-C 935 applies to engagements to perform a compliance audit in accordance with generally accepted auditing standards (GAAS), the standards for financial audits under government auditing standards, or a governmental audit requirement that requires an auditor to express an opinion on compliance. It is not applicable when governmental audit requirements call for an examination under the Statements on Standards for Attestation Engagements (SSAEs) of an entity’s internal controls over compliance. (AU-C 935.02–.03)

DEFINITIONS OF TERMS

Source: AU-C 935.11. For definitions related to AU-C 935, see Appendix A, “Definitions of Terms”: Applicable compliance requirements, Audit findings, Audit risk of noncompliance, ...