Exam 16: Auditing Governments and Not-For-Profit Organizations

Under which set of auditing standards is the auditor required to test compliance with laws and regulations that could have a direct and material effect on the financial statements of the entity?

The Schedule of Findings and Questioned Costs should include all of the following except

A CPA has conducted an audit of the financial statements of an entity that received federal financial assistance and had one program that qualified as a major program.The CPA's responsibility related to reporting on compliance for this entity is to

Which of the following is NOT included in the general requirements for which the auditor must test compliance with federal regulations?

The Single Audit Act of 1984 was passed to eliminate the costly practice of requiring separate audits for each federal program in which an organization participated.

Under the Single Audit Act,the required report on compliance and on internal control over financial reporting

GAO independence guidelines permit CPA firms to determine the estimated useful lives of their clients' assets.

In a performance audit of a not-for-profit organization,procedures that auditors would follow to gain an understanding of management controls would NOT include

Which of the following statements about the GAO is NOT true?

An audit of a government or not-for-profit under the Single Audit Act has two main components: an audit of the financial statements under general accepted auditing standards GAAS)and an audit of federal financial awards.

Which of the following must have an audit under GAGAS?

Under GAO GAGAS)standards,independent auditors must report all instances of fraud or illegal acts that they discover during the course of an audit.

Which of the following is not a unique characteristic that distinguishes ethical decisions made by employees of governments from those made by employees of for-profit entities?

An independent CPA is conducting an audit of an entity that receives federal financial assistance and is subject to the GAO standards GAGAS).The auditor must design the audit to provide reasonable assurance of detecting which of the following?

Which the following is not included in the GAO auditing standards for financial statement audits?

An independent CPA is conducting an audit of an entity that is subject to the GAO audit standards,but is not subject to the OMB audit standards.While conducting the audit,the CPA found that the entity had violated a law that had a large,but not material,potential penalty associated with such violation.There was no accrual for the potential penalty or disclosure of the violation.What actions)must the CPA take with regard to this violation?

Performance audits must be conducted by independent auditors.

Which of the following is an example of a financial audit?

Which of the following is NOT a key difference between financial and performance audits?

The AICPA originally established auditing standards for federal single audits.