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Generally Accepted Accounting Principles for the Federal Government
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In October 1999, the American Institute of Certified Public Accountants (AICPA) issued
Statement on Auditing Standard (SAS) No. 91, Federal GAAP Hierarchy, which amended SAS
No. 69, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles in the Independent Auditor’s Report (AICPA, Professional Standards, vol. 1, AU sec.
411). SAS No. 91 established the following hierarchy of accounting principles for federal
government entities.
“(a) … FASAB Statements and Interpretations, as well as AICPA and FASB
pronouncements specifically made applicable to federal government entities by FASAB
Statements or Interpretations; … (b) FASAB Technical Bulletins and, if specifically made
applicable to federal government entities by the AICPA and cleared by the FASAB, AICPA
Industry Audit and Accounting Guides and AICPA Statements of Position; … (c) AICPA
AcSEC Practice Bulletins if specifically made applicable to federal government entities
and cleared by the FASAB, as well as Technical Releases of the Accounting and Auditing
Policy Committee of the FASAB; … (d) implementation guides published by the FASAB
staff, as well as practices that are widely recognized and prevalent in the federal
government.”
SAS 91 further states:
“In the absence of a pronouncement covered by rule 203
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or another source of established
accounting principles, the auditor of financial statements of a federal governmental entity
may consider other accounting literature, depending on its relevance in the
circumstances. Other accounting literature includes, for example, FASAB Concept
Statements; the pronouncements referred to in categories
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(a) through (d) of paragraph
10 when not specifically made applicable to federal governmental entities by the
FASAB…’’
Those parts of Title 2 not yet addressed by FASAB are considered to be under category “(a)” in
the hierarchy of accounting principles for federal government entities established by SAS 91 in
the preceding hierarchy.
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3
Rule 203 provides that an auditor should not express an unqualified opinion if the financial
statements contain a material departure from such pronouncements unless, due to unusual
circumstances, adherence to the pronouncements would make the statements misleading.
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These categories consist of FASB statements of financial accounting standards, interpretations,
and technical bulletins; APB opinions; and AICPA accounting research bulletins, technical
bulletins, practice bulletins, as well as related interpretation and implementation guides.
5
Prior to the establishment of FASAB, accounting standards contained in Title 2 were considered
to be a part of GAAP for the federal government.
Page 5 GAO-02-248G – Title 2 Standards Not Superceded by FASAB (11/01)