Question 1

Which type of audit opinion is appropriate if an auditor is not deemed to be independent?

Accepted Answer

A)  Adverse. 
B)  Disclaimer of opinion. 
C)  Qualified. 
D)  Unqualified. 
A)  Adverse. 
B)  Disclaimer of opinion. 
C)  Qualified. 
D)  Unqualified.

Question 2

Tax-exempt organizations are required to pay tax at the corporate or trust rate on the income generated from any trade or business activities unrelated to the entity's tax exempt purpose.

Accepted Answer

A) True 
 B)False

Question 3

The highest bond rating assigned by Moody's is:

Accepted Answer

A)  A+ 
B)  A 
C)  AAA 
D)  AAA+ 
A)  A+ 
B)  A 
C)  AAA 
D)  AAA+

Question 4

The IRS announced that it considers tax-exempt organizations to be one of its four highest enforcement priorities. What are the three areas of concern for the IRS?

Accepted Answer

1.Cost allocations
2.Excess ex

Question 5

The Sarbanes Oxley Act is intended to improve corporate governance and limit the services accounting firms may provide to their audit clients.

Accepted Answer

A) True 
 B)False

Question 6

Assuming an auditee is considered low-risk,the auditor is required to express an opinion on compliance on major programs,which must add up to 25 percent of federal funds expended by the auditee.

Accepted Answer

A) True 
 B)False

Question 7

Government Auditing Standards identify which of the following categories of professional engagements:

Accepted Answer

A)  Financial audits. 
B)  Financial audits and performance audits. 
C)  Financial audits, agreed-upon procedures and performance audits. 
D)  Financial audits, attestation engagements, performance audits, and nonaudit services. 
A)  Financial audits. 
B)  Financial audits and performance audits. 
C)  Financial audits, agreed-upon procedures and performance audits. 
D)  Financial audits, attestation engagements, performance audits, and nonaudit services.

Question 8

Unrelated Business Income Tax is an excise tax,applied to the gross receipts of a business activity. Therefore allocations of expenses incurred in generating the income are irrelevant.

Accepted Answer

A) True 
 B)False

Question 9

If a government failed to report infrastructure assets,the auditor would have to express an adverse opinion on the fund level financial statements.

Accepted Answer

A) True 
 B)False

Question 10

List and explain the five ethical concepts outlined by the Yellow Book.

Accepted Answer

1.Public interest which focuses auditors

Question 11

Currently,a single audit is required for organizations receiving what amount of federal funds?

Accepted Answer

A)  > $100,000. 
B)  > $300,000. 
C)  > $500,000. 
D)  > $700,000. 
A)  > $100,000. 
B)  > $300,000. 
C)  > $500,000. 
D)  > $700,000.

Question 12

Which of the following may be deducted in computing income from unrelated business activities?

Accepted Answer

A)  Ordinary and necessary business expenses. 
B)  $1,000 exemption. 
C)  Charitable contributions. 
D)  All of the above. 
A)  Ordinary and necessary business expenses. 
B)  $1,000 exemption. 
C)  Charitable contributions. 
D)  All of the above.

Question 13

The Single Audit Act is intended to provide assurance to the federal government that federal funds have been expended in accordance with laws and regulations,but does not include a report on internal controls.

Accepted Answer

A) True 
 B)False

Question 14

The use of opinion units allows the auditor to

Accepted Answer

A)  Provide different opinions on different components of the reporting entity. 
B)  Only allow one opinion for entire entity not its components. 
C)  Plan the audit better and increase the effectiveness of substantive procedures. 
D)  Eliminate the need for Test of Controls. 
A)  Provide different opinions on different components of the reporting entity. 
B)  Only allow one opinion for entire entity not its components. 
C)  Plan the audit better and increase the effectiveness of substantive procedures. 
D)  Eliminate the need for Test of Controls.

Question 15

The classification of Net Assets for tax-exempt organizations are consistent with FASB standards for not-for-profit organizations.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following would be a financial audit (or a part of a financial audit)under the Government Auditing Standards?

Accepted Answer

A)  An audit expressing an opinion on the basic financial statements of a state or local government audit. 
B)  An examination to determine whether purchasing procedures are appropriately designed to assure program supplies meet standards. 
C)  Both A and B above. 
D)  Neither A nor B above. 
A)  An audit expressing an opinion on the basic financial statements of a state or local government audit. 
B)  An examination to determine whether purchasing procedures are appropriately designed to assure program supplies meet standards. 
C)  Both A and B above. 
D)  Neither A nor B above.

Question 17

Supporting expenses are not included in the denominator of the program expense ratio.

Accepted Answer

A) True 
 B)False

Question 18

Debt service coverage can only be directly measured from proprietary fund statements.

Accepted Answer

A) True 
 B)False

Question 19

If a tax-exempt organization is found by the IRS to have paid unreasonable benefits,the individual must pay a tax penalty of 25% of the excess benefit and the individuals who approved the benefits must pay a 10% penalty.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not true of Tax-exempt Entities having 501(c)(3)status?

Accepted Answer

A)  Donors to the organization may deduct their contributions as charitable donations. 
B)  Churches and public charities with tax-exempt status must file an information return (Form 990, 990EZ or 990-N) with the IRS annually. 
C)  Tax-exempt entities are prohibited from certain activities such as supporting political candidates. 
D)  None of the above, these are all true of tax-exempt entities. 
A)  Donors to the organization may deduct their contributions as charitable donations. 
B)  Churches and public charities with tax-exempt status must file an information return (Form 990, 990EZ or 990-N) with the IRS annually. 
C)  Tax-exempt entities are prohibited from certain activities such as supporting political candidates. 
D)  None of the above, these are all true of tax-exempt entities.

Which type of audit opinion is appropriate if an auditor is not deemed to be independent?

Tax-exempt organizations are required to pay tax at the corporate or trust rate on the income generated from any trade or business activities unrelated to the entity's tax exempt purpose.

The highest bond rating assigned by Moody's is:

The IRS announced that it considers tax-exempt organizations to be one of its four highest enforcement priorities. What are the three areas of concern for the IRS?

The Sarbanes Oxley Act is intended to improve corporate governance and limit the services accounting firms may provide to their audit clients.

Assuming an auditee is considered low-risk,the auditor is required to express an opinion on compliance on major programs,which must add up to 25 percent of federal funds expended by the auditee.

Government Auditing Standards identify which of the following categories of professional engagements:

Unrelated Business Income Tax is an excise tax,applied to the gross receipts of a business activity. Therefore allocations of expenses incurred in generating the income are irrelevant.

If a government failed to report infrastructure assets,the auditor would have to express an adverse opinion on the fund level financial statements.

List and explain the five ethical concepts outlined by the Yellow Book.

Currently,a single audit is required for organizations receiving what amount of federal funds?

Which of the following may be deducted in computing income from unrelated business activities?

The Single Audit Act is intended to provide assurance to the federal government that federal funds have been expended in accordance with laws and regulations,but does not include a report on internal controls.

The use of opinion units allows the auditor to

The classification of Net Assets for tax-exempt organizations are consistent with FASB standards for not-for-profit organizations.

Which of the following would be a financial audit (or a part of a financial audit)under the Government Auditing Standards?

Supporting expenses are not included in the denominator of the program expense ratio.

Debt service coverage can only be directly measured from proprietary fund statements.

If a tax-exempt organization is found by the IRS to have paid unreasonable benefits,the individual must pay a tax penalty of 25% of the excess benefit and the individuals who approved the benefits must pay a 10% penalty.

Which of the following is not true of Tax-exempt Entities having 501(c)(3)status?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Funds, Inter-fund Transactions

Government-Wide Statements: Capital Assets; Long-Term Debt

Accounting for Special-Purpose Entities Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Financial Reporting by the Federal Government

Filters

Exam 13: Auditing, Tax-Exempt Organizations, and Evaluating Performance

Which type of audit opinion is appropriate if an auditor is not deemed to be independent?

Tax-exempt organizations are required to pay tax at the corporate or trust rate on the income generated from any trade or business activities unrelated to the entity's tax exempt purpose.

The highest bond rating assigned by Moody's is:

The IRS announced that it considers tax-exempt organizations to be one of its four highest enforcement priorities. What are the three areas of concern for the IRS?

The Sarbanes Oxley Act is intended to improve corporate governance and limit the services accounting firms may provide to their audit clients.

Assuming an auditee is considered low-risk,the auditor is required to express an opinion on compliance on major programs,which must add up to 25 percent of federal funds expended by the auditee.

Government Auditing Standards identify which of the following categories of professional engagements:

Unrelated Business Income Tax is an excise tax,applied to the gross receipts of a business activity. Therefore allocations of expenses incurred in generating the income are irrelevant.

If a government failed to report infrastructure assets,the auditor would have to express an adverse opinion on the fund level financial statements.

List and explain the five ethical concepts outlined by the Yellow Book.

Currently,a single audit is required for organizations receiving what amount of federal funds?

Which of the following may be deducted in computing income from unrelated business activities?

The Single Audit Act is intended to provide assurance to the federal government that federal funds have been expended in accordance with laws and regulations,but does not include a report on internal controls.

The use of opinion units allows the auditor to

The classification of Net Assets for tax-exempt organizations are consistent with FASB standards for not-for-profit organizations.

Which of the following would be a financial audit (or a part of a financial audit)under the Government Auditing Standards?

Supporting expenses are not included in the denominator of the program expense ratio.

Debt service coverage can only be directly measured from proprietary fund statements.

If a tax-exempt organization is found by the IRS to have paid unreasonable benefits,the individual must pay a tax penalty of 25% of the excess benefit and the individuals who approved the benefits must pay a 10% penalty.

Which of the following is not true of Tax-exempt Entities having 501(c)(3)status?

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Organizations

Overview of Financial Reporting for State and Local Governments

Modified Accrual Accounting: Including the Role of Fund Balances and Budgetary Authority

Accounting for the General and Special Revenue Funds

Accounting for Other Governmental Fund Types: Capital Projects, Debt Service, and Permanent

Proprietary Funds

Fiduciary Funds, Inter-fund Transactions

Government-Wide Statements: Capital Assets; Long-Term Debt

Accounting for Special-Purpose Entities Including Public Colleges and Universities

Accounting for Private Not-For-Profit Organizations

College and University Accounting Private Institutions

Accounting for Hospitals and Other Health Care Providers

Financial Reporting by the Federal Government

Filters