Exam 15: 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?

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.

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?

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

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

A CPA has conducted an audit of the financial statements of an entity that received federal financial assistance. The CPA identified one major federal program and four nonmajor federal programs. The CPA's responsibility related to the Schedule of Expenditures of Federal Awards is to:

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

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.

Which of the following is NOT included in the general standards of GAGAS?

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

A program audit would include which of the following?

Your audit firm has been asked to perform a Single Audit of the Carrington Public Transportation Authority. The authority receives well over half of its $25 million in revenues from federal transportation grants and other federal programs. The authority has a new controller, whose last position was in private industry. You have been asked to brief the new controller on the criteria for determining major programs for purposes of your audit. REQUIRED: Include in your response an explanation of what is meant by "major programs" and the criteria that should be used in selecting them for audit.

GAO standards specify that performance audit reports should be timely and include several items. Which of the following items is NOT required under the GAO standards?

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?

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

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

The three categories of government auditing standards are

Regarding the single audit process, required supplemental information is considered to be within the scope of the audit.

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

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?