The much anticipated revision to the Yellow Book has arrived and is available at www.gao.gov. Some examples of changes contained in the 2018 Yellow Book include:
- The formatting of the new Yellow Book clearly differentiates the requirements from the application guidance.
- The new Yellow Book adds clarification in the area of independence particularly when auditors also prepare the financial statements of the auditee.
- The new Yellow Book adds clarification in terms of what are some of the baseline requirements for peer review.
- The new Yellow Book defines waste and characterizes what the auditors’ responsibilities are if the auditor detects waste.
The 2018 Yellow Book 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.
Interested in learning more? Sign up for The 2018 Yellow Book Revision.
Charlie Blanton, CPA is the Senior Director of Governmental and Nonprofit Content for Surgent CPE, where he authors Surgent’s government and not-for-profit CPE courses and is a frequent webinar instructor. Charlie has over 25 years of experience in auditing and industry having worked at KPMG, the Texas Society of CPAs, Taylor Publishing, Texas Wesleyan University, and the AICPA.