Need to develop an audit methodology? Check out the perfomance audit chapters in the Yellow Book

Do you need to develop an audit methodology and don’t want to rely on the entire body of knowledge that exists in the SASs?

How could you wind up in that situation?

You might need to develop an audit model for your church denomination, or field programs of an international relief and development organization, or local affiliates of a national organization. Obviously you could just tell your local programs to find a CPA and have them comply with GAAS.

That won’t turn out well. The cost would be too high, there would be a poor fit between what you want to do and the body of audit literature, and the full GAAS routine would likely be overkill for your structure.

So you would need to develop an entire audit model from scratch.

Here’s an idea –

Check out the performance audit fieldwork standards in chapter 6 of the 2012 Yellow Book.

I had opportunity to read & study the performance audit chapter for a project I’m working on. In relatively few pages, chapter 6 outlines an audit approach without a single reference to GAAS.  Yet it parallels that body of knowledge to an extremely high degree.  For example, it defines what we would otherwise call materiality and develops a risk assessment model.

The chapter on fieldwork standards could give you a starting point, or at least an outline, of developing an entire audit methodology.

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