The U.S. Government Accountability Office (GAO) has issued the 2018 revision of Generally Accepted Government Auditing Standards (GAGAS), also known as the “Yellow Book.” Last revised in 2011, the Yellow Book is designed to help government auditors at the federal, state, and local levels produce high-quality audits that reflect competence, integrity, objectivity, and independence.
The GAO first issued the Yellow Book in 1972, and the current version was issued in 2011. The amendments modernize GAGAS and include developments in the auditing, accountability, and financial management professions since the 2011 Revision.
Yellow Book Amendments
Key amendments include:
- A new format that differentiates requirements from application guidance;
- Updated independence requirements for auditors who prepare the financial statements of an audited entity;
- Revised peer review requirements for audit organizations;
- New guidance to address waste and abuse as defined under government auditing standards; and
- Updated internal control guidance for performance audits.
In updating the Yellow Book and to ensure that the new standards meet the needs of government auditors, the Comptroller General established an advisory council consisting of representatives from federal, state, and local governments, as well as the private sector and academia, to review proposed changes.
The revised standards in the 2018 Yellow Book are effective for financial audits, attestation engagements, and reviews of financial statements for periods ending on or after June 30, 2020, and for performance audits beginning on or after July 1, 2019. Early implementation is not permitted.
The 2018 Yellow Book supersedes the 2011 revision, the 2005 Government Auditing Standards: Guidance on GAGAS Requirements for Continuing Professional Education (GAO-05-568G, April 2005), and the 2014 Government Auditing Standards: Guidance for Understanding the New Peer Review Ratings (D06602, January 2014). The 2018 revision should be used until further updates and revisions are made.
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