Author Archives: Charlie Blanton, CPA

In recent years, a constant mantra of the AICPA’s peer review and technical staff has been that auditors are struggling with the risk assessment standards (primarily AU-C sections 315 and 330). Common deficiencies cited by the AICPA include: [1] auditors failing to gain an understanding of internal control when identifying the client’s risks; [2] incomplete […]

Sometimes, not-for-profits and governments can be tempted to not take their grant applications and reporting seriously. However, entities which choose this path do so at their own peril. For example, in March 2019, Duke University agreed to pay the federal government $112,500,000 to resolve claims that it violated the False Claims Act by submitting applications […]

The 2018 Yellow Book is effective for financial audits for periods ending on or after June 30, 2020. However, that does not mean that auditors can wait until 2020 to become familiar with the new standards. A prime example of why early familiarity is necessary lies in the area of independence. Under the Yellow Book, […]

Throughout 2019, not-for-profit entities (NFPs) are implementing ASU No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities. ASU No. 2016-14 allows flexibility in how and where certain information is presented. Recently, I reviewed the audited financial statements for 20 NFPs which have implemented ASU No. 2016-14 to see the choices they are making. NFPs are […]

We’ve all been there. In a meeting to discuss a significant change that is occurring we sense that we should say something. But what? This scenario closely aligns to what many firms are encountering as they audit the first round of not-for-profits that have implemented ASU No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities. […]

While the Yellow Book has been around since 1972, it was the 1988 revision of the standards which first established specific hourly CPE requirements for auditors working on Yellow Book engagements. The genesis of the CPE requirements stems from auditing history and experience as much as anything. When auditors leave college, they typically have little […]

As December 31, 2018, draws nigh, not-for-profits are thinking more and more about the implementation of ASU No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities. Under ASU No. 2016-14, not-for-profits continue to be required to provide information about expenses by their functional classification either on the statement of activities or in the notes to […]

Detecting a finding provides information. Detecting what caused the finding leads to transformation. Under the 2018 Yellow Book, findings may involve: (1) a deficiency in internal control (2) noncompliance with provisions of laws, regulations, contracts, or grant agreements; or (3) instances of fraud. Regardless of the type of finding identified, the root cause of a […]

ASU No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities, is effective for fiscal years beginning after December 15, 2017. With limited exceptions, the amendments in ASU No. 2016-14 are required to be applied on a retrospective basis in the year that ASU No. 2016-14 is first applied. A retrospective application entails the application of […]

When in the course of human events it becomes necessary for auditors to implement the 2018 Yellow Book (i.e., financial audits for periods ending on or after June 30, 2020) it is important that they not overlook a new requirement found in the Yellow Book’s quality control requirements. Under the 2018 Yellow Book, at least […]