GAGAS (Yellow Book)

Definition

Generally accepted government auditing standards (GAGAS), known as the Yellow Book, are issued by the US Government Accountability Office. They apply when law, regulation, a contract, or a grant requires an audit under Government Auditing Standards. A financial audit under GAGAS follows GAAS and adds requirements on independence, competence and continuing education, quality management, reporting on internal control and compliance, and documentation.

Why it matters in an audit or review

Single audits require a GAGAS financial audit. The independence rules are stricter than AICPA rules for some nonattest services, and the 2024 revision applies to financial audits, attestation engagements, and reviews of financial statements for periods beginning on or after December 15, 2025, and to performance audits beginning on or after that date. Auditors who plan, direct, perform procedures for, or report on a GAGAS engagement must complete at least 80 hours of CPE in every two-year period, 24 of them on the government environment, government auditing, or the audited entity's specific environment. The auditor also reports on internal control and on compliance, in a separate report or combined with the audit report.

Example

Illustrative: a city's auditor documents a threat to independence from preparing the city's financial statements. The firm applies safeguards, uses a designated oversight person at the city, and records the evaluation before accepting the engagement.

Common mistakes

Citing GAAS only in the report when a GAGAS audit was required.

FAQ

Does GAGAS replace GAAS?

No. It adds to GAAS. The report refers to both.

Sources

• GAO, Government Auditing Standards: 2024 Revision (GAO-24-106786): effective-date statement and paragraph 4.16 (CPE). https://www.gao.gov/yellowbook/overview
• 2 CFR 200.514, scope of audit (single audits conducted under Government Auditing Standards)