If you work in auditing or plan to after you earn your CPA license, fulfilling your continued professional education requirements may be a little more challenging than you realize. Auditors, especially those working for government entities, have to follow generally accepted government auditing standards (GAGAS), and their continued professional education, or CPE, has to support their career and specialization. To help you grow in your career and maintain compliance, we're outlining the Yellow Book CPE requirements you need to be aware of.
What is the Yellow Book?
Before we dive into CPE, let's make sure you know the basics. The Yellow Book is the common name for the generally accepted government auditing standards (GAGAS). The United States Government Accountability Office originally drafted the standards and guidelines for auditors and audit organizations to use in 1972, and they are responsible for updating and maintaining them. The GAO prints the standards and guidelines in a book to provide a framework for the role as an auditor, including ethics, integrity, objectivity, use of government information and resources, and professional behavior.
The Yellow Book outlines the standards for three types of audits:
- Performance audits are used to improve performance of an organization, such as how to improve efficiency, make more informed decisions, and reduce costs.
- Financial audits determine in an independent assessment, whether the organization has reported their financial information fairly and accurately.
- Attestation engagements assess and report on assertions made by leadership or management within an organization.
How did the Yellow Book get its name?
Prior to its initial printing in 1972, the team within the GAO who put together the book wanted it to have a gold cover to correspond with the working title, "The Golden Rules of Accounting." However, Elmer Staats, the Comptroller General at the time, thought that was presumptuous, so they called it the Yellow Book instead.
When was the Yellow Book last updated?
The most recent version of the government auditing standards was released in 2018 though the GAO has released some technical updates since then. More specifically, in May 2020, the GAO released an alert to offer more time and flexibility to meet CPE requirements, while in August 2020, they issued an alert on the importance of increased attention during audits due to COVID-19 and the increase of fraud risks.
Who needs to use the Yellow Book?
Anyone who audits federal, state, and local government programs and entities or those who audit recipients of government grants and awards need to use these standards when they produce their reports.
What are the Yellow Book CPE requirements?
To maintain compliance with Yellow Book CPE requirements, auditors are required to complete 80 hours of CPE every two years. Of those 80 hours, a minimum of 20 hours should be completed in each year (meaning auditors shouldn't try to get all 80 hours in the same year). Also, 24 hours of the 80 hours should be designated as "government CPE."
Government CPE has three subcategories, and your CPE hours can come from any of them (so there's no need to get eight hours in each subcategory):
- Government environment includes topics like GAGAS or the GAO Green Book which covers internal control standards
- Government Accounting Standards Board, appropriations, or government ethics
- Government auditing includes topics like information technology auditing, regulations, trends, risks, or topics relevant to government auditing
- Specific or unique environment of the audited entry which means taking CPE courses related to a specific environment that you are auditing. For example, if you're completing Housing and Urban Development audits, or audits in school districts or police departments, you could take courses related to these unique environments.
To meet the rest of your Yellow Book CPE requirements, you'll need to complete 56 additional hours in any subject matter that will "directly enhance auditors' professional expertise to conduct engagements." This is a pretty broad definition, but can include topics related to information technology audits, audit risk assessments, improving written reports, or identifying fraud in government contracting.
Complete your Yellow Book CPE requirements with Becker
Becker makes it easy to complete your Yellow Book CPE requirements with courses. We offer a wide variety of government auditing courses and so much more to help you continually grow in your career. Be sure to sign up for the 2023 Yellow Book Update which will keep you up-to-date on the latest information.