In this episode of THE SAMPLE, Leita Hart-Fanta, CPA answers the question, “What is the GAO Green Book?” The Green Book’s formal title is Standards for Internal Control in the Federal Government and is a close copy of the COSO model.
Welcome to The Sample, a quick discussion of auditing concepts and terms that will help you do your work. Conducting an audit in accordance with auditing standards is no small feat and I want to support you. We’ll be referring to the GAO, IIA and AICPA literature to bolster our conversations. Let’s get started.
Transcript for WHAT IS THE GAO GREEN BOOK?
In this episode we answer the question, “What is the GAO’s Green Book?” Well, it’s an ideal. It’s an ideal for internal controls.
Have you seen this model before? This is called the COSO cube. I’ll explain who COSO is here in just a few minutes. It is a model that helps us both evaluate (that’s what auditors use it for) and create (that’s what managers use it for) internal controls.
This model’s been around for quite a while, since the early nineties. The face has always been problematic. Very recently, the COSO organization… This is what COSO stands for (it’s a very odd acronym): Committee of Sponsoring Organizations of the Treadway Commission. They took that face of the model (which is not intuitive, a little tricky – this is not as easy to understand as some other models that we’re aware of) and broke it into 17 underlying principles. Notice, these are the five components on the face, and they broke it into 17 underlying principles.
The GAO Green Book and the COSO model are the same thing
Now, the Green Book is the same thing as the COSO model, but it was put out by the GAO. Now, when the COSO model was published in 2013, it cost $200 to get a copy of it. The GAO offers it for free online, which is really lovely.
GAO stands for Government Accountability Office. They are the legislative auditor of the federal government. They have a responsibility given to them by Congress to set internal control standards for federal agencies. They copied the COSO cube and that $200 document, almost word for word, and put it into this document, the Green Book.
A little bit of history
So a little bit of history here. The ’92 COSO model (COSO cube) did not have 17 principles. In 2013, they added more granularity, reorganized the document, made it easier to work with. The GAO, in 2014, published this book, which is called Standards for Internal Control in the Federal Government. That is the formal title of the Green Book. Published that in 2014.
GAO Green Book integrated into GAO Yellow Book
If you are an auditor, as many people in my audience are, you are aware that the Green Book terminology and concepts have been integrated into the Yellow Book, which, yes, the GAO loves colored covers on their documents.
The 2018 revision adds a lot of the terms and concepts of the GAO Green Book into the performance audit chapter. I recommend that you read these sections and make sure you’re in compliance both in your documentation of internal control, your testing of internal control, and (that’s more than both) in your reporting on internal control. So, let’s say all three.
Wrapping it up
So what is the GAO Green Book? It’s the COSO cube written for application in the government realm, and it’s free online. Hope that helps.
That wraps it up for another episode of The Sample. True to the nature of a sample, we didn’t talk about everything, so you’ve probably got questions. Write to me at firstname.lastname@example.org and I’ll do my best to fill in the blanks. Thanks for playing.
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