Tuesday, August 30, 2011

Essential Audit Skills and Audit Report Writing in Austin this Fall

Essential Audit Skills and Audit Report Writing in Austin this Fall

Two courses designed specifically for auditors - REGISTER TODAY!

  • Essential Audit Skills (2-Day Course)
    – October 24 & 25, 2011

  • The Art of the Finding
    – November 14, 2011

Courses will be held at the Thompson Center on the University of Texas campus in Austin, Texas*

Qualifies for Yellow Book CPE hours!



Austin, TX *Austin – a fun destination

The best time to visit Austin is between October and April; the weather is mild and activities abound. Our training location is on the UT Campus adjacent to the Capital complex and convenient to music and cultural hotspots.
Want to learn more about Austin? Visit www.austin360.com/this-is-austin/
For DIRECTIONS and HOTELS, click here.



Essential Audit Skills – 2-Day Course

$290 for 16 hours of Governmental CPE

After several projects, the new auditor begins to piece together his or her role in the auditing process. Without an understanding of key audit skills, new auditors can easily spend valuable audit hours doing the wrong thing.

New auditors will feel more comfortable doing their work once they understand the essentials of each phase of the audit - planning, risk assessment, audit program design, fieldwork, working paper development, and issue development. This course covers the latest standards and concepts regarding risk assessment and internal control assessments and covers the basics of the auditor’s responsibilities for fraud detection.

Objectives:

  • How to develop a finding or audit issue
  • How to gather evidence for audit conclusions and opinions
  • How to document what you’ve done in the working papers
  • What the steps of the audit are and how your work fits in
  • Which standards you must follow
  • How to document and consider the risk of fraud
  • How to evaluate the strength of internal controls
  • When to discuss progress and issues with your supervisor
  • How to distinguish between over-auditing and under-auditing

Program level: Beginning

Instructional method: Group live instruction

NASBA Category of Study: Auditing (Governmental)

Advance Preparation: None

Who should attend: Auditors with less than one year of government audit experience. Auditors and monitors of governmental funds and programs who need to understand how to apply governmental auditing standards to their work and recipients of governmental funds who undergo auditing or monitoring from an oversight or granting agency. This course is applicable to both internal auditors and external auditors and monitors.

Recommended CPE credit: 16 hours of NASBA qualified hours that counts toward the 24 hour Yellowbook CPE requirements

Location: Thompson Center on the University of Texas Campus in Austin, Texas

Date: October 24 & 25, 2011

TO REGISTER FOR THIS COURSE:

1. Download and complete registration form
2. Fax or mail as directed on form (include payment if not paying online)

To pay online, click the register button below:

SCHEDULE:
Registration: 8 a.m.
Course begins: 8:30 a.m.
Lunch: 11:30 a.m.
Day ends: 5:00 p.m.



The Art of the Finding

$180 for 8 hours of Yellow Book Qualified CPE

A logically organized finding is a gift to the reader and to the tax-paying public. By using a few key guidelines on content and organization, the team can create an audit report masterpiece! This course is centered on the Yellow Book and IIA requirements regarding audit findings and reports.

Objectives:

  • Generate concise and logical findings in an hour or less
  • Choose the strongest content for your finding
  • Justify how much detail to share in the report
  • Quantify findings
  • Edit findings and provide meaningful feedback

Program level: Intermediate

Delivery method: Group live

Recommended CPE credit: 8 hours

Who should attend: Auditors who write or review audit reports

Location: Thompson Center on the University of Texas Campus in Austin, Texas

Hours: 8:30 am - 5:00 pm

Date: November 14, 2011

TO REGISTER FOR THIS COURSE:

1. Download and complete registration form
2. Fax or mail as directed on form (include payment if not paying online)

To pay online, click the register button below:

SCHEDULE:
Registration: 8 a.m.
Course begins: 8:30 a.m.
Lunch: 11:30 a.m.
Day ends: 5:00 p.m.



Leita Hart-FantaLeita Hart-Fanta, CPA, CGFM, CGAP makes auditing fun and easy. Leita is the author of numerous self-study courses on governmental auditing including The Yellow Book Interpreted and The Risk Assessment SASs. She is the creator and owner of Yellowbook-CPE.com and has led over 900 seminars and workshops for state societies of CPAs, Western CPE, CPA firms, and federal and local government audit shops. She is a monthly columnist for Single Audit Magazine.www.auditskills.com

Yellow Book 2011 Internet Version Issued

final publication stalled until the AICPA finishes its clarification project later this year.

But this is good to go. More analysis as I take a closer look at it later this week...

http://www.gao.gov/yellowbook


Peace of mind

I get around as I work - I've been to every state except Oregon and West Virginia - yes, I keep track. And as I travel I see that many, many Americans are hurting. The economic news seems even worse in Europe. I am blessed to be in Texas - where our economy is robust. (And Governor Perry - who is running for President - will be more than glad to take credit for it! )

And as you can tell from my previous blog posts, I have been keeping an eye on the federal debt and the whacky behaviors of local governments.

Not long ago, I created a blog post that concerned some of my readers. I was stepping off of the American traditional upward path and simplifying my life. I liquidated all of my investments and sold my house and moved into a similar rental. I had a strong sinking feeling about our economy back in January of this year and my husband and I acted on it. (It kind of reminded me of John Lennon's song 'Watching the Wheels" about stepping off the 'success' merry go round.)

And as I did this - friends and family (and because I was trying to share!) my readers assumed that my business wasn't going well and that I was broke. Quite to contrary. Business is better than ever. Knock knock. And I am still ambitious and plan on owning a home on the lake someday...but that doesn't mean I want to see all of my resources dashed by another downturn on Wall Street or in real estate.

These last few days we have all watched the stock market run up and down. We have heard about poor employment numbers and weak consumer confidence.

I think 'weak consumer confidence' describes my mental attitude quite well.

And I want you to know that being highly liquid and debt feels absolutely FABULOUS! Yes, I realize that the dollar is getting weaker, but until I can figure out where to put my money next, I am surely not going to put it where I know it will take a hit.

Was selling the house and moving hard? Oh yes - very. Excruciating - actually. Did I have to tolerate the skeptical looks of my friends, neighbors, and family? Oh, yes. Did I doubt myself? Yes. Am I happy about it now - 8 months later? Heck yes! I have peace of mind for the first time in a long time. I recommend stepping off the upwardly-mobile-facade-fueled-merry-go-round to anyone.

I'll keep you advised - in case you feel like stepping off with me.


the inevitable downgrade

Standard & Poor’s took the unprecedented step of downgrading the U.S. government’s “AAA” sovereign credit rating Friday in a move that could send shock waves through global. The following is a press release from Standard & Poor’s:

– We have lowered our long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’ and affirmed the ‘A-1+’ short-term rating.

– We have also removed both the short- and long-term ratings from CreditWatch negative.

– The downgrade reflects our opinion that the fiscal consolidation plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.

– More broadly, the downgrade reflects our view that the effectiveness, stability, and predictability of American policymaking and political institutions have weakened at a time of ongoing fiscal and economic challenges to a degree more than we envisioned when we assigned a negative outlook to the rating on April 18, 2011.

– Since then, we have changed our view of the difficulties in bridging the gulf between the political parties over fiscal policy, which makes us pessimistic about the capacity of Congress and the Administration to be able to leverage their agreement this week into a broader fiscal consolidation plan that stabilizes the government’s debt dynamics any time soon.

– The outlook on the long-term rating is negative. We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to, higher interest rates, or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

TORONTO (Standard & Poor’s) Aug. 5, 2011–Standard & Poor’s Ratings Services said today that it lowered its long-term sovereign credit rating on the United States of America to ‘AA+’ from ‘AAA’. Standard & Poor’s also said that the outlook on the long-term rating is negative. At the same time, Standard & Poor’s affirmed its ‘A-1+’ short-term rating on the U.S. In addition, Standard & Poor’s removed both ratings from CreditWatch, where they were placed on July 14, 2011, with negative implications.

The transfer and convertibility (T&C) assessment of the U.S.–our assessment of the likelihood of official interference in the ability of U.S.-based public- and private-sector issuers to secure foreign exchange for debt service–remains ‘AAA’.

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.

Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see “Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). Nevertheless, we view the U.S. federal government’s other economic, external, and monetary credit attributes, which form the basis for the sovereign rating, as broadly unchanged.

We have taken the ratings off CreditWatch because the Aug. 2 passage of the Budget Control Act Amendment of 2011 has removed any perceived immediate threat of payment default posed by delays to raising the government’s debt ceiling. In addition, we believe that the act provides sufficient clarity to allow us to evaluate the likely course of U.S. fiscal policy for the next few years.

The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year’s wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability.

Our opinion is that elected officials remain wary of tackling the structural issues required to effectively address the rising U.S. public debt burden in a manner consistent with a ‘AAA’ rating and with ‘AAA’ rated sovereign peers (see Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41). In our view, the difficulty in framing a consensus on fiscal policy weakens the government’s ability to manage public finances and diverts attention from the debate over how to achieve more balanced and dynamic economic growth in an era of fiscal stringency and private-sector deleveraging (ibid). A new political consensus might (or might not) emerge after the 2012 elections, but we believe that by then, the government debt burden will likely be higher, the needed medium-term fiscal adjustment potentially greater, and the inflection point on the U.S. population’s demographics and other age-related spending drivers closer at hand (see “Global Aging 2011: In The U.S., Going Gray Will Likely Cost Even More Green, Now,” June 21, 2011).

Standard & Poor’s takes no position on the mix of spending and revenue measures that Congress and the Administration might conclude is appropriate for putting the U.S.’s finances on a sustainable footing.

The act calls for as much as $2.4 trillion of reductions in expenditure growth over the 10 years through 2021. These cuts will be implemented in two steps: the $917 billion agreed to initially, followed by an additional $1.5 trillion that the newly formed Congressional Joint Select Committee on Deficit Reduction is supposed to recommend by November 2011. The act contains no measures to raise taxes or otherwise enhance revenues, though the committee could recommend them.

The act further provides that if Congress does not enact the committee’s recommendations, cuts of $1.2 trillion will be implemented over the same time period. The reductions would mainly affect outlays for civilian discretionary spending, defense, and Medicare. We understand that this fall-back mechanism is designed to encourage Congress to embrace a more balanced mix of expenditure savings, as the committee might recommend.

We note that in a letter to Congress on Aug. 1, 2011, the Congressional Budget Office (CBO) estimated total budgetary savings under the act to be at least $2.1 trillion over the next 10 years relative to its baseline assumptions. In updating our own fiscal projections, with certain modifications outlined below, we have relied on the CBO’s latest “Alternate Fiscal Scenario” of June 2011, updated to include the CBO assumptions contained in its Aug. 1 letter to Congress. In general, the CBO’s “Alternate Fiscal Scenario” assumes a continuation of recent Congressional action overriding existing law.

We view the act’s measures as a step toward fiscal consolidation. However, this is within the framework of a legislative mechanism that leaves open the details of what is finally agreed to until the end of 2011, and Congress and the Administration could modify any agreement in the future. Even assuming that at least $2.1 trillion of the spending reductions the act envisages are implemented, we maintain our view that the U.S. net general government debt burden (all levels of government combined, excluding liquid financial assets) will likely continue to grow. Under our revised base case fiscal scenario–which we consider to be consistent with a ‘AA+’ long-term rating and a negative outlook–we now project that net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 79% in 2015 and 85% by 2021. Even the projected 2015 ratio of sovereign indebtedness is high in relation to those of peer credits and, as noted, would continue to rise under the act’s revised policy settings.

Compared with previous projections, our revised base case scenario now assumes that the 2001 and 2003 tax cuts, due to expire by the end of 2012, remain in place. We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act. Key macroeconomic assumptions in the base case scenario include trend real GDP growth of 3% and consumer price inflation near 2% annually over the decade.

Our revised upside scenario–which, other things being equal, we view as consistent with the outlook on the ‘AA+’ long-term rating being revised to stable–retains these same macroeconomic assumptions. In addition, it incorporates $950 billion of new revenues on the assumption that the 2001 and 2003 tax cuts for high earners lapse from 2013 onwards, as the Administration is advocating. In this scenario, we project that the net general government debt would rise from an estimated 74% of GDP by the end of 2011 to 77% in 2015 and to 78% by 2021.

Our revised downside scenario–which, other things being equal, we view as being consistent with a possible further downgrade to a ‘AA’ long-term rating–features less-favorable macroeconomic assumptions, as outlined below and also assumes that the second round of spending cuts (at least $1.2 trillion) that the act calls for does not occur. This scenario also assumes somewhat higher nominal interest rates for U.S. Treasuries. We still believe that the role of the U.S. dollar as the key reserve currency confers a government funding advantage, one that could change only slowly over time, and that Fed policy might lean toward continued loose monetary policy at a time of fiscal tightening. Nonetheless, it is possible that interest rates could rise if investors re-price relative risks. As a result, our alternate scenario factors in a 50 basis point (bp)-75 bp rise in 10-year bond yields relative to the base and upside cases from 2013 onwards. In this scenario, we project the net public debt burden would rise from 74% of GDP in 2011 to 90% in 2015 and to 101% by 2021.

Our revised scenarios also take into account the significant negative revisions to historical GDP data that the Bureau of Economic Analysis announced on July 29. From our perspective, the effect of these revisions underscores two related points when evaluating the likely debt trajectory of the U.S. government. First, the revisions show that the recent recession was deeper than previously assumed, so the GDP this year is lower than previously thought in both nominal and real terms. Consequently, the debt burden is slightly higher. Second, the revised data highlight the sub-par path of the current economic recovery when compared with rebounds following previous post-war recessions. We believe the sluggish pace of the current economic recovery could be consistent with the experiences of countries that have had financial crises in which the slow process of debt deleveraging in the private sector leads to a persistent drag on demand. As a result, our downside case scenario assumes relatively modest real trend GDP growth of 2.5% and inflation of near 1.5% annually going forward.

When comparing the U.S. to sovereigns with ‘AAA’ long-term ratings that we view as relevant peers–Canada, France, Germany, and the U.K.–we also observe, based on our base case scenarios for each, that the trajectory of the U.S.’s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

Standard & Poor’s transfer T&C assessment of the U.S. remains ‘AAA’. Our T&C assessment reflects our view of the likelihood of the sovereign restricting other public and private issuers’ access to foreign exchange needed to meet debt service. Although in our view the credit standing of the U.S. government has deteriorated modestly, we see little indication that official interference of this kind is entering onto the policy agenda of either Congress or the Administration. Consequently, we continue to view this risk as being highly remote.

The outlook on the long-term rating is negative. As our downside alternate fiscal scenario illustrates, a higher public debt trajectory than we currently assume could lead us to lower the long-term rating again. On the other hand, as our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction–independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners–lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government’s debt dynamics, the long-term rating could stabilize at ‘AA+’.

On Monday, we will issue separate releases concerning affected ratings in the funds, government-related entities, financial institutions, insurance, public finance, and structured finance sectors.

Online Federal Budget "HERO" Game

http://marketplace.publicradio.org/features/budget_hero/

Fun, in a nerdy, accountant sort of way!

Rhode Island City files chapter 9 because of pensions

Bankrupt Rhode Island city may default: S&P

Related Topics

A ''For Sale'' sign is seen outside the boarded up entrance to the Central Falls Department of Parks and Recreation in Central Falls, Rhode Island August 1, 2011. REUTERS/Brian Snyder

NEW YORK | Fri Aug 5, 2011 12:36pm EDT

(Reuters) - Even an anti-default state law might not prevent Central Falls, the tiny Rhode Island city forced into bankruptcy by ballooning pension costs, from defaulting on some debt, credit agency Standard & Poor's warned Friday.

Rhode Island enacted the law to safeguard other cash-strapped cities and towns in the state to reassure potential investors who might be alarmed by the possibility that more bankruptcies lie ahead.

Bankruptcies are rare events in the municipal bond market, but the economies and fiscal health of many states, counties, cities and towns are under stress because of the shallowness of the country's recovery from the recession.

This intensifies concerns that there will be more bankruptcies, a step being considered by Alabama's Jefferson County.

A Jefferson County bankruptcy would be the biggest in U.S. history. As demonstrated by California's Vallejo, which filed for bankruptcy three years ago, this strategy can be lengthy and expensive.

Standard & Poor's, referring to the recent Rhode Island law's technical name in its statement, said:

"Given the Chapter 9 bankruptcy filing, the prospect of full and timely payments on the General Obligation debt is uncertain, notwithstanding that, pursuant to the recently amended Rhode Island General Laws in Chapter 45-12-1, a first lien on ad valorem taxes and general fund revenues secures the bonds."

S&P said the outlook for Central Falls, which only has 19,000 residents, was "developing." In May, the credit agency cut the city's credit rating to C from BBB-minus.

Central Falls is current on all its debt payments, S&P said. "City officials have expressed to Standard & Poor's that Central Falls intends to continue to make full debt service payments and prioritize debt," it said.

Now under the control of a receiver, Central Falls has an $80 million shortfall in its pension fund and its bill for retiree healthcare is more than four times its annual $17 million budget.

City officials have asked the bankruptcy court to reject its collective bargaining agreements with the police, fire, and municipal employees unions, S&P said.

That is not the only harsh medicine expected: Central Falls officials also plan to wring most cost savings out of city workers. S&P said the methods include "increased copayments, deductibles, and coshares of premiums on active employee and retiree health plans and a reduction in pension plan cost-of-living adjustments."

(Reporting by Joan Gralla, Editing by Chizu Nomiyama)