Author Archives: Charlie Blanton, CPA

While the Yellow Book has been around since 1972, it was the 1988 revision of the standards which first established specific hourly CPE requirements for auditors working on Yellow Book engagements. The genesis of the CPE requirements stems from auditing history and experience as much as anything. When auditors leave college, they typically have little […]

As December 31, 2018, draws nigh, not-for-profits are thinking more and more about the implementation of ASU No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities. Under ASU No. 2016-14, not-for-profits continue to be required to provide information about expenses by their functional classification either on the statement of activities or in the notes to […]

Detecting a finding provides information. Detecting what caused the finding leads to transformation. Under the 2018 Yellow Book, findings may involve: (1) a deficiency in internal control (2) noncompliance with provisions of laws, regulations, contracts, or grant agreements; or (3) instances of fraud. Regardless of the type of finding identified, the root cause of a […]

ASU No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities, is effective for fiscal years beginning after December 15, 2017. With limited exceptions, the amendments in ASU No. 2016-14 are required to be applied on a retrospective basis in the year that ASU No. 2016-14 is first applied. A retrospective application entails the application of […]

When in the course of human events it becomes necessary for auditors to implement the 2018 Yellow Book (i.e., financial audits for periods ending on or after June 30, 2020) it is important that they not overlook a new requirement found in the Yellow Book’s quality control requirements. Under the 2018 Yellow Book, at least […]

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 […]

Nonprofits with December 31, 2018 year-ends will be implementing ASU No. 2016-14. As this effective date draws near, many are finding a challenging aspect of ASU No. 2016-14 to be the new disclosures related to: (1) how a nonprofit manages its liquid resources available to meet cash needs for general expenditures within one year; and […]

Avoiding Audit Documentation Dilemmas

In the Auditor’s Responsibility section of the audit report, auditors discuss their responsibility to express an opinion and that they conducted the audit in accordance with GAAS and potentially other standards (e.g., the Yellow Book, the Uniform Guidance for Federal Awards, etc.). Since auditors are required to apply AU-C section 230, Audit Documentation, as part […]

Not-for-profit entities with 12/31/18 year-ends will be implementing ASU No. 2016-14, Presentation of Financial Statements of Not-for-Profit Entities in their financial statements. With limited exceptions (related to comparative financial statements in the areas of the new functional and natural expense analysis and the new liquidity and availability disclosures) ASU No. 2016-14 is required to be […]

If you are a movie fan, you are likely looking forward to this summer’s releases of Solo, A Star Wars Story, Incredibles 2, or perhaps Jurassic World: Fallen Kingdom. Well, if you audit governments and/or not-for-profits, another summer blockbuster to watch for is the 2018 Yellow Book revision. It is estimated that the new Yellow […]