The New Yellow Book
Government Auditing Standards
AICPA Series

It is essential all auditors performing Yellow Book audits understand the recently revised concepts and standards of generally accepted government auditing standards (GAGAS). This book provides a baseline of information for accountants to gain an understanding of the new Yellow Book (2018 revision of Government Auditing Standards).

Featuring new guidance related to independence and peer review, this book will increase your knowledge of the requirements and application guidance related to:

• Ethics
• Independence
• Standards for financial audits
• Attestation engagements
• Performance audits

Key topics covered include:

• Foundation and principles for the use and application of generally accepted government auditing standards (GAGAS)
• General requirements for complying with the Yellow Book
• Ethics, independence, and professional judgment
• Competence and continuing professional education
• Quality control and peer review
• Standards for financial audits
• Standards for attestation engagements and reviews of financial statements
• Fieldwork standards for performance audits
• Reporting standards for performance audits

Chapter 1 1-1

Foundation and Principles for the Use and Application of Government Auditing Standards 1-1

What is GAGAS? 1-2

Brief history of Government Auditing Standards 1-3

The 2018 Yellow Book 1-5

Acquiring the Government Auditing Standards publication 1-7

Why is GAGAS important? 1-8

Types of GAGAS users 1-11

Types of GAGAS engagements 1-12

Terms used in this course and in GAGAS 1-16

Chapter 2 2-1

General Requirements for Complying with Government Auditing Standards 2-1

Introduction 2-2

Complying with GAGAS 2-3

Relationship between GAGAS and other professional standards 2-5

Stating auditor compliance with GAGAS in the audit report 2-7

Chapter 3 3-1

Ethics, Independence, and Professional Judgment 3-1

Introduction 3-2

Ethical principles 3-3

Independence 3-6

GAGAS conceptual framework approach to independence 3-8

Providing nonaudit services to audited entities 3-19

Consideration of specific nonaudit services 3-24

Considerations regarding independence — Governments 3-30

Documentation of independence considerations 3-34

Professional judgment 3-35

Chapter 4 4-1

Competence and Continuing Professional Education 4-1

Introduction 4-2

Competence 4-3

Continuing professional education 4-7

Chapter 5 5-1

Quality Control and Peer Review 5-1

Introduction 5-2

Quality control and assurance 5-3

External peer review 5-16

External peer review — Peer review teams 5-21

Chapter 6 6-1

Standards for Financial Audits 6-1

Introduction 6-2

Additional GAGAS requirements for conducting financial audits 6-3

Practice exercise 6-10

Additional GAGAS requirements for reporting on financial audits 6-13

Case study 6-21

Chapter 7 7-1

Standards for Attestation Engagements and Reviews of Financial Statements 7-1

Introduction 7-2

Examination engagements 7-5

Attest review and agreed-upon procedures engagements 7-20

Review of financial statement engagements 7-21

Chapter 8 8-1

Fieldwork Standards for Performance Audits 8-1

Introduction 8-2

Planning 8-4

Conducting the engagement 8-10

Supervision 8-20

Evidence 8-21

Audit documentation 8-24

Chapter 9 9-1

Reporting Standards for Performance Audits 9-1

Reporting on auditors’ compliance with GAGAS 9-3

Report format 9-4

Report content 9-5

Obtaining the views of responsible officials 9-14

Report distribution 9-15

Reporting confidential or sensitive information 9-16

Discovery of insufficient evidence after report release 9-17

Glossary Glossary 1

Index Index 1

Solutions Solutions 1

Chapter 1 Solutions 1

Chapter 2 Solutions 1

Chapter 3 Solutions 2

Chapter 4 Solutions 6

Chapter 5 Solutions 11

Chapter 6 Solutions 12

Chapter 7 Solutions 15

Chapter 8 Solutions 16

Chapter 9 Solutions 17

Rebecca Meyer, CPA, CGMA, is President of RAM CPA, PLLC located in Raleigh, NC and is a seasoned CPA and management accountant with more than 22 years of technical finance and leadership expertise in various aspects of attest, accounting and compliance services. Her firm specializes in collaborating with state and local governments, nonprofit organizations, small businesses, regulators, and other CPA firms to provide high quality audit, attest, accounting, finance, and compliance services. Prior to forming her own firm, Ms. Meyer worked for 11 years as a Technical Manager in the AICPA's Professional Ethics Division, where she helped to enforce the AICPA's Code of Professional Conduct by investigating allegations of violations of technical accounting and attest standards, including U.S. Generally Accepted Accounting Principles (GAAP), Generally Accepted Auditing Standards (GAAS), Generally Accepted Government Auditing Standards (GAGAS), Uniform Guidance, ERISA, and others. In this role, she assisted in remediation and education of members to improve the overall quality of professional services performed in the industry. She specializes in government, nonprofit and single audit engagements. She serves on the AICPA's Technical Standards Subcommittee as well as the Government Accounting and Auditing Committee and the Nonprofit Accounting and Auditing Committee of the North Carolina Association of CPAs.