![]() GASB Issues an Exposure Draft, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments.55, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments, was approved in March 2009. The GAAP hierarchy currently is contained in the American Institute of Certified Public Accountants’ (AICPA) professional auditing literature in Statement of Auditing Standards (SAS) No. 69, The Meaning of Present Fairly in Conformity With Generally Accepted Accounting Principles. Primary Objective:The objective of this project is to incorporate into the GASB’s authoritative literature the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of state and local governmental entities that are presented in conformity with generally accepted accounting principles (the GAAP hierarchy). Please send your comment letters to GAO’s Yellow Book Comments inbox at no later than April 28, 2023.įor more information, contact James R.Hierarchy of Generally Accepted Accounting Principles (GAAP Hierarchy) All comments received from the public will be considered a matter of public record and will be posted on the GAO website. To assist in developing comments, specific questions are presented in enclosure II of the 2023 exposure draft. GAO is requesting comments on this draft from federal, state, and local government officials managers and auditors at all levels of government the public accounting profession academia professional organizations public interest groups and other interested parties. ![]() This exposure draft includes the advisory council’s input regarding the proposed changes. The advisory council includes experts from federal, state, and local government the private sector and academia. To help ensure that the standards continue to meet the needs of federal, state, and local governments and the public these bodies serve, the Comptroller General of the United States appointed a Comptroller General’s Advisory Council on Government Auditing Standards to discuss and review GAO’s proposed revisions and consider any other necessary changes. See enclosure I of the 2023 exposure draft for a summary of the major proposed changes. Proposes application guidance for key audit matters to provide clarity for financial audits of government entities and entities that receive government financial assistance. Provides for the use of engagement quality reviews, if the audit organization determines that engagement quality review is an appropriate response to address one or more quality risks.ħ. Promotes scalability of the standard for use by audit organizations differing in size and complexity.Ħ. Emphasizes monitoring of the entire system of quality management and includes a new requirement to investigate the underlying causes of identified quality management deficiencies.ĥ. Adds a quality management risk assessment process and an information and communication component to the framework for the system of quality management.Ĥ. Emphasizes the responsibility of leadership for quality management within an audit organization and requires senior leadership to take an active role in the system of quality management.ģ. Directs audit organizations that are subject to selected standard setters' quality management standards to comply with those requirements and specific additional Yellow Book requirements to avoid the potential burden of audit organizations designing and maintaining separate systems of quality management.Ģ. Some of the major proposed changes from the 2018 revision include the following:ġ. The proposed Yellow Book revision would replace extant chapter 5, "Quality Control and Peer Review," paragraphs 5.01 through 5.59, and add additional application guidance to chapter 6, "Standards for Financial Audits." The proposed revisions in the 2023 exposure draft update the Yellow Book to reflect major developments in the auditing and accountability professions and emphasize specific considerations applicable to the government environment. ![]() GAO invites comments on the proposed revisions to Government Auditing Standards, commonly known as the Yellow Book. ![]()
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