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Publications

2011 Yellow Book Independence - Non Audit Services Documentation Practice Aid

Publisher: AICPA
  • $29.00-$39.00
    2011 Yellow Book Independence - Non Audit Services Documentati Online Access Product #: APAYBI12D
    AICPA Member: $29.00
    Non-Member: $39.00

2011 Yellow Book Independence—Nonaudit Services Documentation Practice Aid, will assist auditors performing audits in accordance with the 2011 revision to Government Auditing Standards (also referred to as the Yellow Book) issued by the Government Accountability Office in identifying and evaluating threats to independence for nonaudit services when considering whether to provide a nonaudit service. It will also assist auditors in applying the conceptual framework for independence contained in the 2011 Yellow Book (Yellow Book Conceptual Framework) and in complying with the Yellow Book’s independence documentation requirements, including the evaluation of management’s skills, knowledge, and experience.

Developed via a coordinated effort of the AICPA’s Governmental Audit Quality Center and the AICPA ethics and peer review teams, with practitioner and federal agency input, the practice aid will help auditors with audit engagements of all types and sizes. However, it highlights the following nonaudit services that are frequently performed for smaller entities:

  • Preparing financial statements
  • Preparing journal entries other than proposed audit entries
  • Preparing reconciliations

The remainder of the practice aid is full of valuable information for auditors to consider when going through this process. For example, detailed appendices are provided that include, among other things, real-life examples of actual non-audit service scenarios and how an auditor might respond to them. Additionally, the practice aid provides information on how an auditor might consider an auditee’s skills, knowledge, or experience, which is a requirement for every nonaudit service provided. Finally, an actual illustrative completed version of the template is provided.

Special Supplement!

Included with the practice aid is an electronic template that auditors can prepare and save to meet the Yellow Book documentation requirements when identifying and evaluating threats to independence relating to nonaudit services. That is, auditors can input their responses to various independence considerations outlined in the template for each engagement. The template can then be easily saved and used as part of the audit documentation.

Even though the 2011 Yellow Book is not effective for financial audits and attestation engagements performed until periods ending on or after December 15, 2012, auditors performing nonaudit services must be independent for the period covered by the financial statements. Therefore, auditors may be required to comply with the 2011 Yellow Book independence requirements for nonaudit services performed as early as January 1, 2012.

AICPA members can access the practice aid without the electronic supplement at no cost by clicking here to visit the Governmental Audit Quality Center (GAQC) on the AICPA Web site. You must be logged in to access the document.

Governmental Audit Quality Center members are eligible for an additional discount by using a promotion code provided by the GAQC. The code is to be entered towards the end of the purchase transaction and the discount will be applied to the transaction on the final purchase page.

This product is an electronic download file that will be accessible immediately after completing your purchase. Access to this file – from the My Download page – expires 90 days from purchase date. Please note this product purchase is non-refundable. For more information about this product or service concerns, please contact the AICPA Service Center at service@aicpa.org or call 888-777-7077.

Excerpt

Purpose of This Practice Aid

This practice aid will assist auditors performing audits1 in accordance with the 2011 revision to Government Auditing Standards2 (the 2011 Yellow Book) issued by the Government Accountability Office (GAO) in identifying and evaluating threats to independence for nonaudit services when considering whether to provide a nonaudit service. It will also assist auditors in applying the conceptual framework for independence contained in the 2011 Yellow Book (Yellow Book Conceptual Framework) and in complying with the Yellow Book’s independence documentation requirements. Users of this practice aid should consult the original material referenced in this practice aid for a complete understanding of the standards, requirements, and guidance.

This practice aid will be useful to auditors having audit engagements of all types and sizes.However, this practice aid highlights the following nonaudit services that are frequently performed for smaller entities:

  • Preparing financial statements
  • Preparing journal entries other than proposed audit entries
  • Preparing reconciliations

An auditor could use various approaches to meet the independence evaluation and documentation requirements of the 2011 Yellow Book; therefore, use of this particular practice aid is not required. This practice aid is intended to provide an illustration of one methodology that could be used by an auditor. However, auditors using their own internal methodologies are encouraged to review this practice aid to ensure that such methodologies do not need to be enhanced or revised.

Finally, auditors are encouraged to use this practice aid in the manner that is best suited for their practice. For example, this practice aid illustrates the evaluation and documentation of all nonaudit services for an engagement in a single document. Alternatively, auditors may prefer to use this practice aid in a manner that would address each individual nonaudit service in separate documents.

For additional information and guidance on the 2011 Yellow Book, auditors can refer to the GAO’s website at www.gao.gov/yellowbook and the AICPA Governmental Audit Quality Center website at www.aicpa.org/GAQC.

1 The term audit, as used in this practice aid, refers to financial audits and attestation engagements conducted in accordance with Government Auditing Standards (the Yellow Book).
2 The 2011 revision to the Yellow Book is effective for financial audits and attestation engagements performed for periods ending on or after December 15, 2012. However, auditors performing nonaudit services must be independent for the period covered by the financial statements. Therefore, auditors may be required to comply with the 2011 Yellow Book independence requirements for nonaudit services performed as early as January 1, 2012.

System Requirements

Table of Content

About the Publisher

AICPA

About the AICPA The American Institute of CPAs is the world’s largest member association representing the accounting profession, with more than 412,000 members in 144 countries, and a history of serving the public interest since 1887. AICPA members represent many areas of practice, including business and industry, public practice, government, education and consulting. The AICPA sets ethical standards for the profession and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, and offers specialty credentials for CPAs who concentrate on personal financial planning; forensic accounting; business valuation; and information management and technology assurance. Through a joint venture with the Chartered Institute of Management Accountants, it has established the Chartered Global Management Accountant designation, which sets a new standard for global recognition of management accounting.