GAO issues final standards on auditor independence.

• Position: Standards Update - General Accounting Office - Brief Article

In late January, the U.S. General Accounting Office issued a final standard on auditor independence requirements. The changes to Government Auditing Standards (also known as the Yellow Book) apply to periods beginning on or after Oct. 1, 2002.

The new standard states that auditors should not perform management functions, make management decisions, audit their own work or provide non-audit services in situations where the amounts or services involved are significant or material to the subject matter of the audit.

The new standards also include new "supplemental safeguards." For nonaudit services that do not violate the above principles, several supplemental safeguards would have to be met...