For those working on governmental audits, the ‘Yellow Book’ is used to perform much of the audit.  The Yellow Book is the Government Accounting Office’s manual of Generally Accepted Government Auditing Standards (GAGAS).  It is published annually and it contains all of the updated rules and standards for conducting audits in the public sector.  The cover is yellow, hence the nickname ‘Yellow Book’.  It is used by auditors of government entities, entities that receive government awards, and other audit organizations performing Yellow Book audits.  Auditors of federal, state, and local government programs use the guidance to perform their audits and produce their reports.  The 2018 revision of the Yellow Book is the most current version being followed.     

Yellow Book Education Requirements

Professionals who are performing Yellow Book audits are required to have a portion of their required continuing professional education (CPE) hours be directly related to GAGAS subject matter.  In the 2018 Yellow Book, the standards state that obtaining CPE on specific GAGAS topics, particularly during years in which there are revisions to the standards, may assist auditors in maintaining the competence necessary to conduct GAGAS engagements.  The standards also state that auditors assigned to an engagement must collectively possess competence for the engagement’s objectives and GAGAS before beginning work on the engagement.

For auditors who plan, direct, perform and report on audit engagements in accordance with GAGAS, it is expected that 80 hours of CPE will be obtained in a two-year period, with at least 20 of those hours in each year.  Of the 80 hours, at least 24 hours must be directly related to the government environment, government auditing, or the specific environment in which the entity being audited operates.  The remaining 56 hours should consist of information that will directly increase the professional’s expertise in conducting audit engagements.  Documentation of meeting these requirements must be maintained. 

24 Hour Requirement CPE Examples

Fortunately, the Yellow Book details the types of CPE that would satisfy the 24- hour requirement detailed above.  The subject matter of the CPE should include information from the following sources:

    • GAGAS and related topics, such as internal control
    • American Institute of Certified Public Accountants’ (AICPA) Statements on Auditing Standards 
    • Applicable AICPA Statements on Standards for Attestation Engagements and Statements on Standards for Accounting and Review Services
    • Applicable auditing standards issued by the Institute of Internal Auditors, the Public Accounting and Oversight Board, the Internal Auditing and Assurance Standards Board or other auditing standard-setting body
    • Generally Accepted Accounting Principles or the applicable financial reporting framework being used
    • Standards for Internal Control in the Federal Government (Government Accountability Office)
    • Internal Control–Integrated Framework (Committee of Sponsoring Organizations)

Applicable topics for the required CPE:

  • Requirements for recipients of federal contracts or grants
  • Requirements for federal, state, or local program audits
  • Relevant or applicable audit standards or guides
  • Applicable information technology auditing information
  • Applicable fraud information
  • Relevant courses on statutory requirements, regulations, criteria, guidance, trends, or risks
  • Subjects directly related to the government environment
  • Specialized audit methodologies or analytical techniques
  • Obtaining evidence
  • Professional skepticism
  • Government ethics and independence
  • Partnerships between governments, businesses, and citizens
  • Legislative policies and procedures
  • Fraud, waste, abuse, or improper payments affecting government entities
  • Compliance with laws and regulations