2018 Government auditing standards update

This summer, the U.S. Government Accountability Office (GAO) issued an update to Generally Accepted Government Auditing Standards (GAGAS). GAGAS is commonly referred to as the “Yellow Book” and are designed to provide a framework for high-quality government audits. The standards are applicable to certain governmental entities and other entities receiving federal government awards, such as not-for-profit organizations and institutes of higher education.

This revision supersedes the 2011 revision of the Yellow Book and is effective for financial statements for periods ending on or after June 30, 2020.

Overall, the 2018 update focused primarily on reorganizing the Yellow Book more than substantial changes to the underlying standards. However, key updates to be aware of include:

• Combined presentation of each chapter that includes the requirements followed by application guidance
• Definition for waste and related examples
• Requirement for the auditor to document a significant threat, and the safeguards put in place to address that threat, when auditors prepare financial statements from client records

For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.