Compliance Reporting Under Government Auditing Standards (GAS):

GAS requires auditors to assess compliance with applicable laws, regulations, contracts, and grant agreements during audits.

Compliance reporting typically includes:

Identifying areas of noncompliance.

Describing the auditor's responsibility for compliance testing.

Outlining the scope of compliance testing.

Explanation of Answer Choices:

A. Areas of noncompliance: Included in compliance reporting to highlight where the entity failed to meet requirements.

B. The auditor's responsibility for tests of compliance: GAS requires auditors to clarify their role in compliance testing.

C. Review of major internal control cycles: Correct. While internal controls may be assessed, reviewing "major internal control cycles" is not a direct component of compliance reporting.

D. The scope of the compliance testing: GAS mandates that the scope of testing be disclosed in the compliance report.

References:

GAO,Government Auditing Standards (Yellow Book).

AICPA,Compliance Reporting Guidance for Government Audits.