GASB Statement 34 ComplianceAuditor Perspective James M' Williams Ernst

1
GASB Statement 34 ComplianceAuditor Perspective
James M. WilliamsErnst Young LLPCleveland,
OhioApril 25, 2001
2
External Auditor Division

• Jim Williams
• Establishing historical cost
• Traditional/depreciation method
• Gerry Boaz
• Modified approach
• Required supplementary information

3
Audit Objectives for Capital Assets

• Existence or occurrence
• Completeness
• Rights and obligations
• Valuation or allocation
• Presentation and disclosure

4
Internal Control Over Capital Assets

• Acquisitions and dispositions
• Infrastructure ownership
• Depreciation
• Reporting and disclosures

5
Auditor Concerns about New GASB 34 Reporting
Requirements

• Governmental activities in government-wide
  financial statements
• Capital and infrastructure asset requirements
• Valuation of infrastructure assets
• Systems capability and controls
• Implementation and transition

6
Establishing Infrastructure Records

• Only major assets required
• Historical records
• Estimated historical cost
• Deflating current replacement
• Available historical records

7
Traditional (Depreciation) Method

• Useful lives and salvage values
• Depreciation method
• Accumulated depreciation
• Statements of net assets and activities
  affected

8
Involve Your Auditor inGASB 34 Implementation

• Agreement on approach, decisions, and
  documentation
• Agreement on implementation schedule and audit
  timing