The Importance of Audit Standards in 340B

A 340B audit is a defining measure for covered entities (CE’s). As such, it should only be completed with the very highest standards.

Though not required by the Health Resources & Services Administration (HRSA), leveraging Government Auditing Office’s (GAO) Yellow Book standard, also referred to as Generally Accepted Government Auditing Standards(GAGAS), in a 340B audit can elevate its results and effectiveness. 

“Given the high stakes facing entities and the complexity of 340B programs, auditing standards should absolutely be applied,” said Rx|X Co-Founder Suzanne Herzog.

When GAGAS standards are applied, entities experience:

• Stronger planning and documentation:  Every audit starts with a structured plan, continuous communication, and rigorous internal control testing.

• Clear, transparent reporting:  Findings are presented with neutrality, clarity, and actionable recommendations.

• Evidence-driven conclusions:  Each result is supported by documentation that strengthens credibility.
  

This is because GAGAS and the Yellow Book standards heighten and scrutinize data. Both add rigor to the auditing process. 

The updated 2024 Yellow Book is 260 pages of 340B audit strategy and standards. According to this edition, “The professional standards presented in Government Auditing Standards 2024 Revision provide a framework for providing high-quality audit work with competence, integrity, objectivity, and independence. Such performance provides accountability and helps government operations and services.” 

Per the government website, GAGAS “contains standards for financial audits, attestation engagements, and performance audits as well as specific requirements for individual auditors and audit organizations.” 

Rx|X uses these standards across their audits.“We built our firm’s approach to auditing based on the necessary foundation of experience with government audits, regulatory compliance, and program oversight,” said Rx|X Co-Founder Dr. Madeline Wallack.

These standards further empower both consistency and credibility across Rx|X’s 340B audits.

“With our prior government auditing experience, when Madeline and I launched Rx|X, we knew it was important to apply much of that strategy over to our audits at Rx|X,” said Herzog. “We saw how GAGAS standards quickly set CE’s on a successful path. Few auditors outside of government have this level of rigor in their auditing standards.”

To learn more about how Rx|X applies GAGAS standards, schedule a consultation here.