What auditing standards are typically incorporated into Government Auditing Standards?

The correct answer incorporates the concept of auditing standards specifically designed for the government sector. Government Auditing Standards, often referred to as the Yellow Book, primarily builds upon Generally Accepted Auditing Standards (GAAS). These standards ensure the reliability, objectivity, and accountability of public sector audits. The Yellow Book includes additional requirements tailored for government audits, emphasizing compliance with laws, regulations, and grant agreements, which are pivotal for public accountability.

The answer given is not the most accurate in this context, as the question is best answered by referencing Generally Accepted Auditing Standards. GAAS serves as the foundational framework and is essential for establishing basic auditing principles applicable across different sectors, including government.

In contrast, ISO Standards are global standards focusing on quality management and various operational processes, which are not specifically tailored to auditing contexts. Statement of Auditing Standards, while related to GAAS, specifically refers to auditing standards issued by the Auditing Standards Board, mainly applicable to private sector audits. International Accounting Standards govern the preparation of financial statements and are distinct from auditing standards.

Understanding these distinctions and how they relate to the specialized nature of government auditing will clarify why Generally Accepted Auditing Standards would be the appropriate foundation to incorporate into Government Auditing Standards.