Clarifying GASB 34: Help for Auditing Governmental Financial Statements

Article excerpt

from the AICPA

State and local governments faced a major change in the way they did financial reporting when, on June 30, 1999, the Governmental Accounting Standards Board issued GASB Statement No. 34, Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments. GASB 34 established new requirements for U. S. state and local governments that prepare their financial reports according to generally accepted accounting principles. The new rules substantially changed the appearance and content of government financial statements.

To help practitioners address the new accounting requirements and several related auditing issues, the AICPA has developed a new Audit and Accounting Guide, "Audits of State and Local Governments (GASB 34 Edition)." The GASB 34 guide addresses the audits of basic financial statements and consideration of required supplementary information (RSI) and other supplementary information (SI) prepared in conformity with the new governmental financial reporting model required by GASB 34 and related pronouncements.

The new guide revises the AICPA's 1994 Audit and Accounting Guide Audits of State and Local Governmental Units (non-GASB 34). The non-GASB 34 guide is updated annually for conforming changes and will remain effective for audits of state and local governments for which the auditor is not required to apply or has not elected to early-apply the new guide's provisions in accordance with effective date provisions.

New Guide's Effective Date

The new guide is effective for audits of a state or local government's financial statements for the first fiscal period ending after June 15, 2003, in which the government applies or is required to apply GASB Statements No. …