Question

As a newly hired staff auditor, you recently completed working on an audit of a publicly-held company and are now assigned to a government engagement that includes a single audit. Your supervisor asks you to familiarize yourself with OMB's Uniform Guidance, the OMB Compliance Supplement, and the Yellow Book. What are these and why are they necessary instead of using generally accepted auditing standards like you used on your recent audit of a publicly-held company and studied in your college auditing classes?

Answer 1

These books and documents are guides used as benchmarks or guidelines to assess the quality of financial reporting undertaken by the government. Since the financial reporting of government is different from a typical business enterprise, hence generally accepted auditing standards used for doing audits at publicly held company won't work and the audit of a government institution has to be done by following guidelines issued in the Uniform Guidance & the compliance supplement.