This section of the AICPA’s Governmental Audit Quality Center (GAQC) Web site is intended to provide links to Practice Aids and tools that will assist auditors in understanding the requirements of Government Auditing Standards, issued by the Comptroller General of the United States (also referred to as the Yellow Book and GAGAS) and includes the following:
- Government Auditing Standards, December 2011 Revision
- 2011 Yellow Book Independence—Nonaudit Services Documentation Practice Aid
- Peer Review Yellow Book Guidance for Peer Reviewers
- AICPA – Government Auditing Standards Independence Rules Comparison
- Archived Web Event on the GAQC 2011 Yellow Book Independence Practice Aid
- Archived Web Event on the 2011 Yellow Book
- Illustrative Yellow Book Audit Reports
- Guidance on GAGAS Requirements for Continuing Professional Education
Government Auditing Standards, December 2011 Revision (also referred to as the Yellow Book)
The professional standards and guidance for financial audits contained in Government Auditing Standards provide a framework for conducting high quality audits with competence, integrity, objectivity, and independence.
2011 Yellow Book Independence—Nonaudit Services Documentation Practice Aid
As communicated in GAQC Alert #188, this GAQC practice aid titled, 2011 Yellow Book Independence—Nonaudit Services Documentation Practice Aid (practice aid), was developed to assist auditors in meeting the requirements in the 2011 revision to Government Auditing Standards (the 2011 Yellow Book) for identifying and evaluating threats to independence when considering whether to provide a nonaudit service. The practice aid will be very helpful to auditors having audit engagements of all types and sizes. However, it highlights the following nonaudit services that are frequently performed for smaller entities:
- Preparing financial statements
- Preparing journal entries other than proposed audit entries
- Preparing reconciliations
One of the key features of the practice aid is a step-by-step questionnaire template that covers the thought process and related auditor documentation considerations when evaluating independence. The remainder of the practice aid contains detailed appendices that include, among other things, real-life examples of actual non-audit service scenarios and how an auditor might respond to them. Additionally, the practice aid provides information on how an auditor might consider an auditee’s skills, knowledge, or experience, which is a requirement for every nonaudit service provided. Finally, an illustrative completed version of the questionnaire template is provided.
Because of the importance of this area and to promote consistency in practice, the practice aid is available in two forms as follows:
Practice Aid Version Designed for Auditor Documentation Input. Because the questionnaire template contained in the Practice Aid will be a valuable tool for auditors, the AICPA developed an electronic version of the template that auditors can prepare and save as part of their audit documentation. That is, auditors can input their responses regarding the various independence considerations outlined in the template. The template, Yellow Book Independence—Nonaudit Services Documentation Practice Aid – Supplement, can then be easily saved and used as part of the audit documentation. There is a small cost associated with accessing this version of the practice aid, which is to be used in conjunction with the wrap-around material in the free flat PDF version (see below). The GAQC member price is $25, the AICPA member price is $28, and the non-member price is $35. GAQC members will need to provide a promotion code to obtain the GAQC member price. Access the promotion code. Order the 2011 Yellow Book Independence – Nonaudit Services Documentation Practice Aid – Supplement.
Free Flat PDF Version. All AICPA members, including GAQC members, are able to access a flat PDF file of the entire practice aid at no cost. Access the free PDF version of the Practice Aid.
Peer Review Yellow Book Guidance
In May 2013, the AICPA Peer Review Board (Board) approved important guidance for evaluating a reviewed firm’s compliance with the December 2011 Revision of Government Auditing Standards (“2011 Yellow Book”). This guidance is in the form of a Q&A for Peer Reviewers and includes an exhibit to assist the peer reviewer in the evaluation. Although this information was developed for peer reviewers, firms who are preparing for their upcoming peer review will find it valuable also. Access the guidance, Evaluation of a Firm's Compliance with 2011 Yellow Book Independence Requirements Related to Nonaudit Services.
AICPA – Yellow Book (GAGAS) Independence Rules Comparison
To help AICPA members comply with the AICPA and Yellow Book standards, this document highlights provisions in the Yellow Book’s Independence Standards and compares them to the relevant independence provisions of the AICPA Code of Professional Conduct (AICPA, Professional Standards, ET sec. 1.200). The AICPA code refers to services that do not require independence as nonattest services whereas the Yellow Book refers to them as nonaudit. This document is designed to be an educational and reference tool for AICPA members and others interested in the subject of independence. It is not an authoritative document and often paraphrases the authoritative literature. It does not establish policy positions, standards, or preferred practices. This guidance is distributed with the understanding that the AICPA is not rendering any legal or ethical advice. Access AICPA – Yellow Book (GAGAS) Independence Rules Comparison.
Archived Web Event on the GAQC 2011 Yellow Book Independence Practice Aid
Listen to an archived Web event titled, Understanding the AICPA's Yellow Book Independence Practice Aid for Performing Nonaudit Services, This event assists participants in understanding the GAQC practice aid described above titled, 2011 Yellow Book Independence—Nonaudit Services Documentation Practice Aid. This practice aid is an important tool for auditors that perform nonaudit services and whose audits are performed under the 2011 revision to Government Auditing Standards.
Archived Web Event on the 2011 Yellow Book
Listen to an archived Web event titled, The New 2011 Yellow Book: What You Need to Know Now. This event assists auditors in understanding the key provisions of the 2011 Yellow Book, particularly its new independence requirements and how they differ from the AICPA’s independence rules. The event also covers several case study examples.
Illustrative Yellow Book Audit Reports
When performing an audit under Government Auditing Standards, it is important to get the auditor reporting correct. Access the latest illustrative Yellow Book audit reports on the GAQC Web site.
Government Auditing Standards: Guidance on GAGAS Requirements for Continuing Professional Education
This document provides guidance to auditors and audit organizations in implementing the continuing professional education (CPE) requirements prescribed by the Government Auditing Standards (Yellow Book) issued by the Comptroller General of the United States of the Government Accountability Office (GAO).