Certified Government Financial Manager (CGFM) Practice Exam 2025 – Your All-in-One Guide to Exam Success!

The Government Accountability Office (GAO) is the primary entity that oversees governmental auditing standards. This organization plays a crucial role in ensuring that federal agencies follow established auditing and accounting practices. The GAO issues the "Yellow Book," formally known as the "Government Auditing Standards," which provides guidelines for conducting audits of government organizations, programs, activities, and functions.

In the context of governmental auditing, the GAO's role includes establishing criteria for auditor independence, accountability, and performance, making it essential for maintaining the integrity of financial reporting and oversight in the public sector. The GAO also conducts audits, reviews, and evaluations which further contribute to its oversight responsibilities in governmental financial management and accountability.

The other entities mentioned have different focuses: the Financial Accounting Standards Board (FASB) primarily deals with the accounting standards for private-sector entities, the Governmental Accounting Standards Board (GASB) focuses on accounting and financial reporting standards for state and local governments, and the Office of Management and Budget (OMB) oversees the federal budget and administrative policies but does not directly set auditing standards.