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  • Product: Guided Assurance

Determine if an entity is a low-risk auditee

Once you've entered federal awards in your Single Audit engagement, you'll determine if the entity is a low-risk auditee. A low-risk auditee is eligible for a lower threshold for testing Major Programs. Major programs are federal programs that, in the aggregate, require testing 40% of total federal awards expended. If you meet the criteria for a low-risk auditee, you're only required to cover 20%. This can possibly result in classifying fewer programs as major programs.
According to the Office of Management and Budget, this determination is necessary for preparing a summary of the auditor's results and for answering this question on the Data Collection Form.
remember
Before you can determine if an entity is low-risk, you'll need to add 1 or more Federal Award to the engagement.
  1. In the engagement, expand the
    Single Audit
     folder and open
    CX-1.5: Single Audit and Major Program Determination worksheet
    .
  2. Select
    Determine low-risk auditee
    .
  3. Answer each question on the screen
    Yes
     or
    No
    .
  4. Continue to answer every question on the screen until 1 of the following shows:
    • This auditee is low-risk.
    • This auditee is not low-risk.
  5. After the determination has been made, select
    Next
     to identify major programs.