As everyone knows, the Comptroller General of the United States has made sweeping changes to Government Auditing Standards. The Peer Review Committee has been and continues to be very involved with interpreting these changes and revising the Peer Review Program to accommodate the new standards.

As everyone knows, the Comptroller General of the United States has made sweeping changes to Government Auditing Standards. The Peer Review Committee has been and continues to be very involved with interpreting these changes and revising the Peer Review Program to accommodate the new standards.

New Independence Standard
As announced and distributed at the annual conference in Toronto during this past June, the Peer Review Committee published Guide to Government Auditing Standards Amendment #3, The New Independence Standard. This is the second Peer Review Committee publication intended to assist members in implementing Government Auditing Standards and is offered as a supplement
to the guidance contained in Government Auditing Standards: Answers to Independence Questions, GAO –02-870G, issued by the Government
Accounting Office in June 2002.

The Peer Review Committee’s independence publication contains three primary sections:

1. Frequently Asked Questions:
Insight into those portions of the independence standard that are most subject to misinterpretation.

2. Personal Impairment Flowchart:
A tool to help identify potential personal independence impairments and applicable requirements relating to nonaudit services. This document reflects
the Peer Review Committee’s suggestion that auditors consider whether financial or performance audit standards can be applied rather than performing work as a nonaudit service. The definition of performance audit is broad and may encompass work that audit organizations have not traditionally considered to be audits. The Peer Review Committee encourages auditors to carefully consider whether to apply performance audit standards in completing such projects, particularly those initiated by the audit organization or those for which the audit organization determines the nature and scope of work to satisfy objectives.

3. 2003 Supplement to the ALGA Quality Control Review Guide:
Guidance, forms and checklists that will be used by peer review teams in completing quality control reviews. These documents summarize what peer review teams will be looking for while they are assessing an audit shop’s compliance with the new independence requirements. This section of the publication should be particularly helpful to audit shops as an outline for developing departmental policies and procedures to address the new independence standard.

I would like to thank the subcommittee consisting of Amanda Noble, Joanne Griggs and Bill Green, who’s hard work and technical expertise made this valuable publication possible.

To obtain a copy of Guide to Government Auditing Standards Amendment #3, The New Independence Standard visit the ALGA web site or contact Joanne Norris of Member Services at (859) 276-0686 or This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

Revised Yellow Book
The Peer Review Committee is in the process of completely updating the ALGA Quality Control Review Guide to accommodate all the changes included in Government Auditing Standards (2003 Revision). As is the case with the current publication, the new Quality Control Review Guide will contain guidance, forms and checklists that will be used by peer review teams
in completing quality control reviews. The Peer Review Committee will make these documents available as soon as possible to aid members in developing policies and procedures to address the new Government Auditing Standards.
The first Peer Review Committee publication offering guidance on interpreting and applying Government Auditing Standards was last year’s
publication What Small Shops Should Know About Passing a ALGA Peer Review.