Does the Yellow Book Apply to My Organization?

To clarify, for purposes of this article we are not talking about the phone book.  Instead, we are talking about a generally accepted standard for audits that goes by many names including Government Auditing Standards, Generally Accepted Government Audit Standards, GAGAS, and the Yellow Book.

The Yellow Book was actually created by the Government Accountability Office as a guide for their own auditors. In 1984 the Single Audit Act was passed by Congress with the purpose of reducing the number of audits that federal grant recipients had to endure.  Before this Act, it was common that a grant recipient was audited by various auditors in a short time span.  Through this process, generally accepted government auditing standards became synonymous with the Yellow Book.  

Do Yellow Book standards apply to your organization?  Well, that depends. The Yellow Book has to be required by something external to it.  It may be called forth by law, policy or your organization’s bylaws.  However, even if not required to, some auditors prefer to follow GAGAS when performing government program audits. 

What does my organization need to know?  In the end, it remains your responsibility (not the auditor’s) to determine whether or not your organization is subject to a Yellow Book audit.  Ensure that you are familiar with your policies, grants and contracts to ensure that you are meeting government auditing standards, and if you have questions about where to look or what to look for, feel free to contact one of the Bergan Paulsen team members.