Question 1

Which of the following groups is responsible for administering the Single Audit Act?

Accepted Answer

A) OMB. 
B) GAO. 
C) AICPA. 
D) State Boards of Accountancy. 
A) OMB. 
B) GAO. 
C) AICPA. 
D) State Boards of Accountancy. A

Question 2

A program audit would include which of the following?

Accepted Answer

A) Determining if sound procurement policies are being practiced. 
B) Determining if efficient operating procedures are being used. 
C) Determining if resources are being used efficiently. 
D) Determining the factors inhibiting satisfactory performance. 
A) Determining if sound procurement policies are being practiced. 
B) Determining if efficient operating procedures are being used. 
C) Determining if resources are being used efficiently. 
D) Determining the factors inhibiting satisfactory performance. D

Question 3

A "cognizant agency" can be an employee of either a federal agency or an independent accounting firm.

Accepted Answer

A) True 
 B)False  False

Question 4

Which of the following is an objective of audits under the Single Audit Act? To ensure that

Accepted Answer

A) The entity's financial statements are not affected by immaterial errors or misstatements. 
B) The entity has not committed fraud. 
C) The entity has in place a system of internal control sufficient to ensure that financial statements are prepared in accordance with generally accepted accounting principles. 
D) The entity is satisfying the laws, regulations, and provisions that apply to each specific federal award. 
A) The entity's financial statements are not affected by immaterial errors or misstatements. 
B) The entity has not committed fraud. 
C) The entity has in place a system of internal control sufficient to ensure that financial statements are prepared in accordance with generally accepted accounting principles. 
D) The entity is satisfying the laws, regulations, and provisions that apply to each specific federal award.

Question 5

An elected state auditor, employed by the state, would NOT be considered independent when auditing which of the following entities?

Accepted Answer

A) A component unit of the state. 
B) An agency of the state. 
C) The office of the state auditor. 
D) All of the above. 
A) A component unit of the state. 
B) An agency of the state. 
C) The office of the state auditor. 
D) All of the above.

Question 6

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

Accepted Answer

A) It is an agency within the executive branch of the federal government. 
B) It is the author of Government Auditing Standards (GAGAS). 
C) It is responsible for auditing all federal agencies and programs. 
D) Its head, the Comptroller General of the United States, is appointed by the President. 
A) It is an agency within the executive branch of the federal government. 
B) It is the author of Government Auditing Standards (GAGAS). 
C) It is responsible for auditing all federal agencies and programs. 
D) Its head, the Comptroller General of the United States, is appointed by the President.

Question 7

Newly installed computer programs are one indicator that a government's participation in a federal program may be at high risk of noncompliance.

Accepted Answer

A) True 
 B)False

Question 8

An auditor is engaged to audit the Eastern Planning and Development District, a not-for-profit entity that receives federal financial assistance.The auditor designed his audit to provide reasonable assurance of detecting material misstatements resulting from illegal acts.What additional requirements does the auditor have with regard to compliance?

Accepted Answer

A) None. 
B) The auditor must design the audit to provide reasonable assurance of detecting noncompliance with terms of grants and contracts. 
C) The auditor must design the audit to provide reasonable assurance of detecting all misstatements resulting from illegal acts. 
D) The auditor must design the audit to provide reasonable assurance of detecting any fraud. 
A) None. 
B) The auditor must design the audit to provide reasonable assurance of detecting noncompliance with terms of grants and contracts. 
C) The auditor must design the audit to provide reasonable assurance of detecting all misstatements resulting from illegal acts. 
D) The auditor must design the audit to provide reasonable assurance of detecting any fraud.

Question 9

The GAO publication Government Auditing Standards (commonly known as the Yellow Book)is applicable in which of the following audit situations?

Accepted Answer

A) To independent CPAs conducting a performance audit of a government that receives no federal financial assistance. 
B) To independent CPAs auditing a nongovernment entity that receives federal financial assistance. 
C) To independent CPAs auditing a government that receives no federal financial assistance. 
D) To state auditors auditing a local government that does not receive federal financial assistance. 
A) To independent CPAs conducting a performance audit of a government that receives no federal financial assistance. 
B) To independent CPAs auditing a nongovernment entity that receives federal financial assistance. 
C) To independent CPAs auditing a government that receives no federal financial assistance. 
D) To state auditors auditing a local government that does not receive federal financial assistance.

Question 10

Which of the following is NOT a necessary condition for a performance audit?

Accepted Answer

A) The auditor must delineate specifically the activities and outcomes to be addressed. 
B) Entity management must have clearly defined operational objectives. 
C) The auditor must obtain an understanding of management controls relevant to the audit. 
D) There must be a schedule of disbursements related to the program. 
A) The auditor must delineate specifically the activities and outcomes to be addressed. 
B) Entity management must have clearly defined operational objectives. 
C) The auditor must obtain an understanding of management controls relevant to the audit. 
D) There must be a schedule of disbursements related to the program.

Question 11

The Yellow Book is an informal term for the compendium of all AICPA audit standards.

Accepted Answer

A) True 
 B)False

Question 12

Under which set of auditing standards is the auditor required to express an opinion on compliance with laws and regulations applicable to each major program?

Accepted Answer

A) AICPA standards. 
B) GAO standards. 
C) OMB standards. 
D) All of the above. 
A) AICPA standards. 
B) GAO standards. 
C) OMB standards. 
D) All of the above.

Question 13

Each federal financial assistance program has specific compliance requirements.Which of the following is not an example of the general nature of the specific compliance requirements?

Accepted Answer

A) Eligibility of individuals or groups to participate in the program. 
B) Allowability of certain types of goods or services that may be acquired. 
C) Maximum dollar amounts of expenditures. 
D) Matching fund requirements. 
A) Eligibility of individuals or groups to participate in the program. 
B) Allowability of certain types of goods or services that may be acquired. 
C) Maximum dollar amounts of expenditures. 
D) Matching fund requirements.

Question 14

An independent auditor has conducted an audit of the financial statements of an entity that receives federal financial assistance, but that is not subject to the OMB standards.What report(s)must the auditor issue at the completion of this engagement?

Accepted Answer

A) Only an opinion (or disclaimer of opinion)on the financial statements. 
B) An opinion (or disclaimer of opinion)on the financial statements and a report on internal control. 
C) An opinion (or disclaimer of opinion)on the financial statements, a report on internal control, and a report on compliance. 
D) An opinion (or disclaimer of opinion)on the financial statements, a report on internal control, and an opinion (or disclaimer of opinion)on compliance. 
A) Only an opinion (or disclaimer of opinion)on the financial statements. 
B) An opinion (or disclaimer of opinion)on the financial statements and a report on internal control. 
C) An opinion (or disclaimer of opinion)on the financial statements, a report on internal control, and a report on compliance. 
D) An opinion (or disclaimer of opinion)on the financial statements, a report on internal control, and an opinion (or disclaimer of opinion)on compliance.

Question 15

Which of the following is true about the public availability of audit reports prepared under GAGAS?

Accepted Answer

A) Only financial statements should be publicly available. 
B) Only performance audits should be publicly available. 
C) Neither financial statement audits nor performance audits should be publicly available. 
D) Both financial statement audits and performance audits should be publicly available. 
A) Only financial statements should be publicly available. 
B) Only performance audits should be publicly available. 
C) Neither financial statement audits nor performance audits should be publicly available. 
D) Both financial statement audits and performance audits should be publicly available.

Question 16

GAO performance audit standards do NOT include which of the following?

Accepted Answer

A) The auditor should be independent of the entity being audited. 
B) The work should be adequately planned. 
C) The auditor should prepare written work papers. 
D) The auditor should obtain an understanding of management controls relevant to the audit. 
A) The auditor should be independent of the entity being audited. 
B) The work should be adequately planned. 
C) The auditor should prepare written work papers. 
D) The auditor should obtain an understanding of management controls relevant to the audit.

Question 17

The three categories of government auditing standards are

Accepted Answer

A) General, field work, and control standards. 
B) General, independence, and reporting standards. 
C) General, field work, and reporting standards. 
D) General, compliance, and documentation standards. 
A) General, field work, and control standards. 
B) General, independence, and reporting standards. 
C) General, field work, and reporting standards. 
D) General, compliance, and documentation standards.

Question 18

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.

Accepted Answer

A) True 
 B)False

Question 19

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?

Accepted Answer

A) Immaterial misstatements, if they result from illegal acts. 
B) Noncompliance with entity policies and procedures. 
C) Noncompliance with the terms of contracts or grant agreements. 
D) All of the above. 
A) Immaterial misstatements, if they result from illegal acts. 
B) Noncompliance with entity policies and procedures. 
C) Noncompliance with the terms of contracts or grant agreements. 
D) All of the above.

Question 20

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 action(s)must the CPA take with regard to this violation?

Accepted Answer

A) Nothing, since the financial statements are not materially misstated. 
B) Must issue an adverse opinion if the financial statements are not changed to reflect the violation. 
C) Must issue a report that details the violation and the potential dollar effect. 
D) Must report the incident to the local law enforcement agency. 
A) Nothing, since the financial statements are not materially misstated. 
B) Must issue an adverse opinion if the financial statements are not changed to reflect the violation. 
C) Must issue a report that details the violation and the potential dollar effect. 
D) Must report the incident to the local law enforcement agency.

Which of the following groups is responsible for administering the Single Audit Act?

A program audit would include which of the following?

A "cognizant agency" can be an employee of either a federal agency or an independent accounting firm.

Which of the following is an objective of audits under the Single Audit Act? To ensure that

An elected state auditor, employed by the state, would NOT be considered independent when auditing which of the following entities?

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

Newly installed computer programs are one indicator that a government's participation in a federal program may be at high risk of noncompliance.

The GAO publication Government Auditing Standards (commonly known as the Yellow Book)is applicable in which of the following audit situations?

Which of the following is NOT a necessary condition for a performance audit?

The Yellow Book is an informal term for the compendium of all AICPA audit standards.

Under which set of auditing standards is the auditor required to express an opinion on compliance with laws and regulations applicable to each major program?

Each federal financial assistance program has specific compliance requirements.Which of the following is not an example of the general nature of the specific compliance requirements?

An independent auditor has conducted an audit of the financial statements of an entity that receives federal financial assistance, but that is not subject to the OMB standards.What report(s)must the auditor issue at the completion of this engagement?

Which of the following is true about the public availability of audit reports prepared under GAGAS?

GAO performance audit standards do NOT include which of the following?

The three categories of government auditing standards are

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.

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?

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Federal Government Accounting

Filters

Exam 16: Auditing Governments and Notforprofit Organizations

Which of the following groups is responsible for administering the Single Audit Act?

A program audit would include which of the following?

A "cognizant agency" can be an employee of either a federal agency or an independent accounting firm.

Which of the following is an objective of audits under the Single Audit Act? To ensure that

An elected state auditor, employed by the state, would NOT be considered independent when auditing which of the following entities?

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

Newly installed computer programs are one indicator that a government's participation in a federal program may be at high risk of noncompliance.

The GAO publication Government Auditing Standards (commonly known as the Yellow Book)is applicable in which of the following audit situations?

Which of the following is NOT a necessary condition for a performance audit?

The Yellow Book is an informal term for the compendium of all AICPA audit standards.

Under which set of auditing standards is the auditor required to express an opinion on compliance with laws and regulations applicable to each major program?

Each federal financial assistance program has specific compliance requirements.Which of the following is not an example of the general nature of the specific compliance requirements?

An independent auditor has conducted an audit of the financial statements of an entity that receives federal financial assistance, but that is not subject to the OMB standards.What report(s)must the auditor issue at the completion of this engagement?

Which of the following is true about the public availability of audit reports prepared under GAGAS?

GAO performance audit standards do NOT include which of the following?

The three categories of government auditing standards are

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.

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?

The Government and Not-For-Profit Environment

Fund Accounting

Issues of Budgeting and Control

Recognizing Revenues in Governmental Funds

Recognizing Expenditures in Governmental Funds

Accounting for Capital Projects and Debt Service

Capital Assets and Investments in Marketable Securities

Long-Term Obligations

Business-Type Activities

Pensions and Other Fiduciary Activities

Issues of Reporting, Disclosure, and Financial Analysis

Not-For-Profit Organizations

Colleges and Universities

Health Care Providers

Managing for Results

Federal Government Accounting

Filters