Yellow Book

Government Auditing Standards (GAS) is also called as “Yellow Book” is a book of standards issued by the Comptroller General of the United States. The standards (referred to as generally accepted accounting principles- GAAP) are for the use of the auditors of government entities and entities government awards. There are three types of government audits such financial audits, attestation audits and performance audits.

All the audits start with objectives and these objectives will classify the kind of audit to be performed and the audit principles to be followed. These kinds of audits as described by their objectives are categorized in these standards such as performance audits and financial audits. Audits might have a combination of performance and financial audit objectives or might have objectives restricted to only a few aspects of the type of audit. For Instance, auditors conduct audits of the government contracts and grants with the private business organization, and also with non profit and government organizations, which often contains both performance and financial objectives. These are generally called as grant audits or control audits. Other examples of type of audits are audits of compliance issues, computer based systems and specific internal controls. Auditors have to follow the principles which are applicable to the individual objectives of the audit.

Financial audits comprise financial related and financial statement audits. Financial statements audits give reasonable guarantee about whether the financial reports of the audit entity present reasonably the results of operations, cash flows in conformity and financial position with GAAP or generally accepted accounting principles. Financial statements audit also comprise audits of the financial statements prepared in the conformity with any of many other bases of the accounting which is discussed in the auditing standards issued by AICPA or American Institute of Certified Public Accountants.

Questionnaire:

• What is Yellow Book or Government Auditing Standards?
• How Audits are classified on the basis of objectives?