Key CPA Exam Takeaways

High-Yield Review

• Government audits are commonly performed under the GAO Yellow Book.
• Yellow Book standards build upon GAAS with additional ethics, independence, quality management, and reporting requirements.
• Government audits include financial audits, attestation engagements, and performance audits.
• Compliance audits evaluate adherence to laws, regulations, grant agreements, and contracts.
• Single Audits combine a financial statement audit with a compliance audit of major federal programs.
• Major federal programs are selected using a risk-based approach.
• Internal control over compliance is tested during Single Audits.
• Government audits include separate reports on internal control, compliance, and audit findings.
• Government auditing emphasizes accountability, stewardship, and transparency in the use of public funds.

Government auditing extends beyond financial reporting to ensure accountability for public resources.