Quality Control Review Reports

Every locality should exercise due diligence when contracting with a public accounting firm for its annual audit. The locality should consider the quality of the public accounting firm through resources such as reviewing the Auditor of Public Accounts' published quality control review reports for the CPA firms.

In accordance with Chapter 4 of the Specifications for Audits of Counties, Cities, and Towns, the Auditor of Public Accounts has established its quality control program to monitor the quality of local government audits. The quality control program also monitors compliance with generally accepted auditing standards, Government Auditing Standards, issued by the Comptroller General of the United States, and the Uniform Guidance Audit Requirements, 2 CFR Part 200—Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards.

Quality control reviews provide an independent review of the auditor's reports and the working papers supporting those reports for a specific locality audit selected for review. The objectives of the quality control review are to determine whether:
  • the audit complies with the Specifications for Audits of Counties, Cities and Towns, issued by the Auditor of Public Accounts;

  • the audit complies with Government Auditing Standards, issued by the Comptroller General of the United States;

  • the audit complies with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards;

  • the annual financial report complies with generally accepted accounting principles for governmental entities; and

  • the auditor has performed the agreed upon procedures for the Comparative Report Transmittal Forms as set forth in the Uniform Financial Reporting Manual, issued by the Auditor of Public Accounts.

Audit documentation must meet the standards established by the AICPA and Government Auditing Standards. Consequently, audit documentation should provide a clear record of work performed and should contain sufficient information so that supplementary oral explanations are not required. Failure to document required procedures may result in a modification to the quality control review report concerning adherence to standards, as further described below.

The final quality control review report addresses the overall adequacy of the audit. Firms can receive a rating of pass, pass with deficiency(ies) or fail. When the Auditor of Public Accounts finds significant deficiencies based on the quality control review, the report will include the findings on matters that require corrective action. Copies of the final reports are distributed to the audit firm, local government officials for the applicable audit, the Virginia Board of Accountancy, and the Virginia Society of Certified Public Accountants.