Tips for single audits amid pandemic uncertainty – Journal of Accountancy
Practitioners who perform single audits have never faced an environment as challenging as the one that has developed as a result of the coronavirus pandemic.
Various federal programs have provided hundreds of billions of dollars in new aid under sometimes uncertain terms. Those funds, many of which were awarded under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136, have kept many grantees afloat in a financial crisis.
But in some cases the new awards come with terms and conditions that may be confusing or leave auditors waiting for additional explanation from regulators that hasn’t arrived yet.
“We’ve been conducting single audits for a long time, and obviously the types of awards our clients receive ebb and flow slightly over the years,” said Kim McCormick, CPA, a partner who leads the not-for-profit practice at Grant Thornton’s Greater Bay Area office in San Jose, Calif., and chairs the AICPA Governmental Audit Quality Center (GAQC) Executive Committee. “But this year there are brand-new awards that come out of the CARES Act, huge awards that impact our auditees and ultimately impact our single audits in a significant way not only because of their size but because the terms and conditions surrounding their use are not always clear.”
The infusion of relief money means that many recipients will exceed for the first time the $750,000 federal funding threshold that triggers the requirement to undergo a single audit, a procedure first mandated by the Single Audit Act of 1984 as a means of instilling confidence