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Government grants, loans, or subsidies can provide the financial resources your organization needs to thrive. However, qualifying for any federal funding program usually requires completing a governmental audit, which ensures that your company complies with all legal requirements and best practices in accounting. If you’re applying for a grant, understanding this process will prepare you for it. To help you do this, here are some of the most common questions people have about governmental business audits.

FAQ About Government Audits

What is a government audit?

Like any other audit, a governmental review of business records is intended to provide assurance that your company adheres to state and federal guidelines. An audit may include an in-depth review of your annual financial statement, the quarterly books, and tax records.

Why would a business undergo a government audit?

Not every business is subject to governmental audits. These record reviews are a prerequisite for federal funding, and are usually required if you are seeking government contracts, loans, or other support.

What are the government auditing standards?

governmental auditsThe rules controlling Government Auditing Standards (GAS) are determined by the Government Accountability Office. Known as the Yellow Book, these standards share some similarities with the standard business audit guidelines, but there are differences any company applying for federal funding should know. For instance, auditors will ensure you comply with the regulations of your grant. 

Who performs the audit?

While audits are mandated by the government in many situations, the review is frequently performed by a fully independent accounting professional. The government requires that auditors have the knowledge and skills to conduct a thorough audit, prepare the appropriate reports, and use quality controls to ensure the accuracy of their conclusions. Since they’re often carried out by Certified Public Accountants (CPA), a CPA will be able to help you prepare the necessary documentation.

 

If you are planning to apply for a government program, the accounting team at Engelson & Associates have the governmental audit experience you need to achieve a successful outcome. With offices in Holmen and La Crosse, WI, they proudly offer a comprehensive range of financial services such as tax preparation and bookkeeping. Visit their website to learn more about how they will help, then call (608) 526-3437 to speak to an accountant in Holmen, or (608) 788-2181 to contact their La Crosse location.

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