Audited Financial Statements
MUNICIPAL GOVERNMENT AUDIT – AN OVERVIEW
The purpose of an audit is to enhance the degree of confidence of intended users in a municipality or organization's financial statements. An audit is essential for governmental accountability to the public.
Section 11-43-85, Code of Alabama, 1975, requires the Mayor, at least once a year, to appoint an independent public accountant to make an examination in accordance with generally accepted auditing standards of all books and accounts of the City and to make a full report in writing to be submitted to the City Council at its first meeting after completion of the report.
The contents of the financial statements are the responsibility of the management of the City of Prattville and are prepared in accordance with accounting principles generally accepted in the United States of America. The auditor's responsibility is to express opinions on the financial statements based on the audit of the books and records. A financial statement audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
The examination of books and records (the audit process) is completed in several steps, including a planning phase, sample testing, controls and transaction testing, disclosure testing, final reporting, and the delivery of the auditor's opinion.
In addition to the American Institute of Certified Public Accountants (AICPA) Professional Standards, auditors of governmental financial statements also follow additional requirements under Government Auditing Standards issued by the United States Government Accountability Office (GAO). These standards of reporting include reporting on internal control and compliance with provisions of laws, regulations, contracts, and grant agreements. Governments with federal grant award expenditures exceeding $750,000 in a fiscal year are also subject to the audit requirements under the United States Office of Management and Budget (OMB) Uniform Guidance (referred to as single audits). This is a rigorous organization-wide audit, that encompasses both financial and compliance components, to provide assurance to the U.S. federal government as to the management and use of the federal funds.
Additional resources regarding government financial reporting and audit requirements can be obtained from the following website links:
www.aicpa.org/Research/Standards/AuditAttest/Pages/SAS.aspx
https://www.federalregister.gov/
Audited Financial Statements
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