Wiley Practitioner's Guide to GAAS 2023, 2nd Edition

49AU-C 935 Compliance Audits

• Scope
• Definitions of Terms
• Objectives of AU-C 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

SCOPE

AU-C 935 applies to engagements to perform a compliance audit under 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, Compliance audit, Compliance requirements, Deficiency in internal control over compliance, Detection risk of noncompliance, Government Auditing Standards. Government program, Governmental audit requirement, Grantor, Known questioned costs, Likely questioned costs, Material noncompliance, Material weakness in internal control over compliance, Organization-wide audit, ...