2018 revisions to the Yellow Book
FINANCIAL REPORTING INSIGHTS |
Brian Schebler, National Director of Public Sector Services for RSM US LLP and a multi-term member of the Comptroller General’s Advisory Council on Government Auditing Standards, is pleased to announce that the U.S. Government Accountability Office recently issued the 2018 revision of Generally Accepted Government Auditing Standards, also known as the “Yellow Book.” The Yellow Book provides standards and guidance for auditors and audit organizations, outlining the requirements for audit reports, professional qualifications for auditors, and audit organization quality control. Government Auditing Standards – 2018 Revision includes major changes from, and supersedes, the 2011 revision. These changes include the following, among others:
- All chapters are presented in a revised format that differentiates requirements and application guidance related to those requirements.
- Supplemental guidance from the appendix of the 2011 revision is either removed or incorporated into the individual chapters.
- The independence standard is expanded to state that preparing financial statements from a client-provided trial balance or underlying accounting records generally creates significant threats to auditors’ independence, and auditors should document the threats and safeguards applied to eliminate and reduce threats to an acceptable level or decline to perform the service.
- The standards include a definition for waste.
- The performance audit standards are updated with specific considerations for when internal control is significant to the audit objectives.
The 2018 revision of Government Auditing Standards is 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.