GAO Press Statement, Friday, January 25, 2002
GENERAL ACCOUNTING OFFICE WASHINGTON DC
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Today, David M. Walker, Comptroller General of the United States and head of the General Accounting Office GAO, announced significant changes to the auditor independence requirements under Government Auditing Standards. These standards, which were first published in 1972 and are commonly referred to as the Yellow Book, cover federal entities and those organizations receiving federal funds. Various laws require compliance with the Comptroller Generals auditing standards in connection with audits of federal entities and funds. Furthermore, many states and local governments and other entities, both domestically and internationally, have voluntarily adopted these standards. While the new standard deals with a range of auditor independence issues, the most significant change relates to the rules associated with nonaudit, or consulting services. Auditors have the capability of performing a range of services for their clients. However, in some circumstances it is not appropriate for them to perform both audit and certain nonaudit services for the sarne client. In these circumstances, the auditor andor their client will have to make a choice as to which of these services they will provide.
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