Development of Auditing Standards in the United States

The development of standards for governmental audits was essential because of the lack of uniformity in standards for audits performed at different levels of government and various agencies. GAO issued standards for auditing government programs and activities with the following objectives: to define the kind needed and provide guidelines and to improve audits conducted by or for State and local governments. A task force of auditors from Federal agencies with a GAO leader was formed to develop the standards. It defined the scope of a governmental audit as having three parts--financial operations and legal compliance, efficiency and economy of operations, and program results. A draft of the standards was sent to Federal and State audit groups and other interested organizations in order to obtain comments. The final standards were issued in 1972. They are divided into general standards, examination and evaluation standards, and reporting standards. In order to foster understanding of the standards and gain acceptance, a press conference was held, briefings and speeches were delivered, supplements were issued, demonstration projects were conducted, and the intergovernmental audit forums were created. GAO also developed a model audit law for State governmets. In order to perform the type of audit work now required, staffing and training must provide for specialty skills. Audit standards have developed unity among auditors and helped to eliminate duplication, thus increasing the efficiency of the audit function.