Seeing red over Yellow Book: revisions make it toughest collection of audit standards.

• Author: Hart-fanta, Leita A.
• Position: Gov'taccounting

The 2007 revision of the Yellow Book (also known as generally accepted government auditing standards) is full of significant requirements that make it the toughest collection of audit standards out there. Along with adding to the AICPA standards, the Yellow Book is much firmer than the Institute of Internal Auditors' Standards.

The Government Accountability Office holds to consistent, principled themes throughout the Yellow Book, including:

* Accountability: the responsibility to explain your actions to others;

* Transparency: the opposite of hiding and obscuring the truth;

* Competence: A combination of education and experience; and

* Service: A reminder that the ultimate customers and beneficiaries of a government audit is the tax-paying public. These principles are directed at auditors to follow and exhibit--and therein lies the difficulty for some.

The following are the top seven aspects of the Yellow Book that, from my vantage point as an instructor on the matter, create difficulty for auditors, followed by the specific sections of the Yellow Book I am referring to.

1. Everyone who touches a Yellow Book engagement in a professional capacity--whether it's to plan, direct, conduct or report--must get 24 hours of continuing professional education that directly relates to government auditing every two years. Previously, those who spent less than 20 percent of their time conducting a Yellow Book engagement were exempt.

2. Continuing education requirements for most folks involved in an audit under these standards skyrocket from 24 hours to 80 hours. Further, the additional 56 hours must relate to auditing, which means most tax courses, for example, do not count This is no big deal to CPAs, who can choose from plenty of eligible courses to meet the requirement. But, in a sense, this requirement discourages practitioners from doing both tax and government audit work because of the commitment to stay up-to-date on both.

   2.46 For auditors, who are involved in any amount of planning, directing or reporting on GAGAS assignments, and those who are not involved in those activities, but charge 20 percent or more of their time annually to GAGAS assignments, also should obtain at least an additional 56 hours of CPE (for 80 total hours of CPE in every two-year period) that enhances the auditor's proficiency to perform audits or attestation engagements.

   For more information, visit www.gao.gov and download Guidance on GAGAS Requirements for Continuing...