On April 5, 2017, the U.S. Government Accountability Office (GAO) released an exposure draft of the Yellow Book with proposed updates to Generally Accepted Government Auditing Standards (GAGAS). The Yellow Book contains guidance for auditors who perform Single Audits for organizations that have federal grants. It includes professional qualifications, audit firm quality control standards, ethics, and independence of the auditor, and continuing education requirements for the auditor. Furthermore, auditors of federal, state, and local government programs use these standards to perform their audits.
“The Yellow Book helps auditors hold the organizations they audit accountable,” states the WatchBlog of the GAO in their post about the exposure draft. The GAO believes the updates will modernize the standards that have not been revised since 2011.
Proposed changes include but are not limited to the following:
Currently, auditors are required to achieve 80 credit hours of total CPE over a two-year reporting cycle; 24 hours must be Yellow Book oriented. This requirement ensures that an auditor is well versed in GAGAS. These requirements did not change in the exposure draft; however, the update includes a new 4-hour CPE requirement for GAGAS topics each time the Comptroller General issues a revision of GAGAS. The exposure draft adds guidance on the topics that qualify as Yellow Book CPE but qualifying CPE is still a matter of auditor judgement.
The draft is open for consideration of all public comment. If you want to write in a comment or suggestion, you can send an email to YellowBookComments@gao.gov no later than July 6, 2017. All comment emails will be posted to the GAO’s Yellow Book webpage as they’re received and reviewed.
For a copy of the exposure draft visit the GAO’s website here.