Lede: Auditors for the City of Astoria said Thursday they will perform both the annual financial statement audit and a federal single audit this year, identified five areas of heightened audit risk and warned the council of new Governmental Accounting Standards Board (GASB) guidance the city must adopt for its 2025 year-end financial statements.

Nut graf: In a pre-audit communication presented at the Aug. 18 council meeting, the engagement lead said the firm formerly known as Moss Adams has merged under the Baker Tilly name but that the same engagement team will continue work on Astoria's account. The auditors told council they would focus their efforts on areas they judge to present the greatest risk of material misstatement and described the planned audit timing and procedures, including interim work and on-site final field work.

Body: The auditor told council that the firm will perform the city's annual financial statement audit and the single audit because Astoria spent more than $750,000 in federal funds during the fiscal year. The firm said it will assist management with drafting the financial statements and related notes and will evaluate internal controls in designing audit procedures, though it will not issue an opinion on internal control.

The auditors identified five significant risk areas they plan to target: management override of controls; revenue recognition and valuation of receivables; existence and valuation of capital assets; completeness of long-term debt and related disclosures; and compliance with federal laws and Oregon minimum standards. The engagement lead emphasized journal-entry testing, interviews with management, testing of accounting estimates, and confirmations with third parties as ways the team will address those risks.

Councilor Davis pressed the auditor on the firm's responsibility for detecting fraud. The auditor replied that the engagement is designed to provide reasonable, not absolute, assurance and that auditors are required to detect material fraud but are not required to detect immaterial fraud. The auditor described materiality as a professional judgment, often calculated as a percentage (commonly 1 3% of total assets or net position) and informed by quantitative and qualitative factors.

The auditor also reviewed upcoming accounting standard changes. GASB 102 (disclosure-focused) and a compensated-absences update (which may require accrual of some sick leave liabilities based on likelihood of payment) were flagged for 2025 reporting. Two other GASB items affecting MD&A and capital-asset disclosures were noted as effective in later years, and the firm said it would work with city finance staff on implementation.

Timing: The auditors said interim procedures would begin in September, final fieldwork would occur the week of Nov. 3, and a draft of the financial statements would be provided to management in December with council presentation planned in January.

Ending: The auditors invited council members to raise questions outside the meeting if significant issues emerge before public reporting and left contact information for follow-up.