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Key Terms
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Certified Internal Auditor (CIA)  An individual who has passed an examination administered by the Institute of Internal Auditors and has met the experience requirements necessary to become certified.
Compliance auditing  Performing procedures to test compliance with laws and regulations.
Compliance Supplement  A publication of the U.S. Office of Management and Budget that specifies audit procedures for federal financial assistance programs.
Compliance with specified requirements  An entity's compliance with specified requirements of laws, regulations, rules, contracts, or grants.
Government Auditing Standards  A document that contains standards for audits of government organizations, programs, activities, and functions and of government assistance received by contractors, and other nonprofit organizations. These standards, often referred to as generally accepted government auditing standards (GAGAS), are to be followed by auditors when required by law or other requirement.
Institute of Internal Auditors (IIA)  The international professional organization of internal auditors.
Internal auditing  An independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.
Internal control over compliance  The process by which management obtains reasonable assurance of compliance with specified laws and regulations.
Major federal financial assistance program (award)  A significant federal assistance program as determined by the auditors based on a risk-based approach. In a single audit, the auditors must provide an opinion on compliance related to major programs.
Management's assertion  Any declaration, or set of related declarations taken as a whole, made by management. In the context of compliance attestation, management's assertion deals with the entity's compliance with specified requirements, the effectiveness of the entity's internal control over compliance, or both.
Noncompliance  The failure to act in accordance with laws, regulations, agreements, or grants.
Operational auditing  The process of reviewing a department or other unit of a business, governmental, or nonprofit organization to measure the effectiveness, efficiency, and economy of operations.
Questioned costs  Those costs paid with federal assistance that appear to be in violation of a law or regulation, inadequately documented, unnecessary, or unreasonable in amount.
Recipient  An organization receiving federal financial assistance directly from the federal agency administering the program.
Single Audit Act  Legislation passed by the U.S. Congress that establishes uniform requirements for audits of federal financial assistance provided to state and local governments. The act was significantly amended in 1996.
Specific requirements  (of laws, regulations, rules, contracts, or grants) In compliance attestation engagements, management asserts that the organization is in compliance with specified requirements, and the CPAs attest to this assertion.
Subrecipient  An organization receiving federal financial assistance passed through from a recipient.

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