Question 1

Which of the following is true regarding the Single Audit Act and its amendments?

Accepted Answer

A)  An auditor is expected to express an opinion on "major programs," which are chosen based on size 
B)  An auditor is required to select all "Type A" programs as major programs 
C)  Both of the above 
D)  Neither of the above 
A)  An auditor is expected to express an opinion on "major programs," which are chosen based on size 
B)  An auditor is required to select all "Type A" programs as major programs 
C)  Both of the above 
D)  Neither of the above

Question 2

Entities that are tax exempt under IRS Section 501(c)3 are prohibited from having surpluses (revenues exceed expenses).

Accepted Answer

A) True 
 B)False

Question 3

The Government Accountability Office has authority for issuing Governmental Auditing Standards.

Accepted Answer

A) True 
 B)False

Question 4

The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund raising to program expenses.

Accepted Answer

A) True 
 B)False

Question 5

Under the terms of the Single Audit Act and its amendments, what percentage of federal awards expenditures must be selected for audit?

Accepted Answer

A)  High Risk Auditee: 100%; Low Risk Auditee: 50% 
B)  High Risk Auditee: 100%; Low Risk Auditee: 25% 
C)  High Risk Auditee: 50%; Low Risk Auditee: 25% 
D)  High Risk Auditee: 50%; Low Risk Auditee: 0% 
A)  High Risk Auditee: 100%; Low Risk Auditee: 50% 
B)  High Risk Auditee: 100%; Low Risk Auditee: 25% 
C)  High Risk Auditee: 50%; Low Risk Auditee: 25% 
D)  High Risk Auditee: 50%; Low Risk Auditee: 0%

Question 6

List four sources of income that is not subject to the unrelated business income tax?

Accepted Answer

Any four of the following:
(a) The busin

Question 7

In order to compute the operating ratio-enterprise funds, one would look in the CAFR in which of the following sections?

Accepted Answer

A)  In the government-wide Statement of Net Assets 
B)  In the proprietary funds Statement of Net Assets 
C)  In the proprietary funds Statement of Revenues, Expenses and Changes in Net Assets 
D)  In the proprietary funds Statement of Cash Flows 
A)  In the government-wide Statement of Net Assets 
B)  In the proprietary funds Statement of Net Assets 
C)  In the proprietary funds Statement of Revenues, Expenses and Changes in Net Assets 
D)  In the proprietary funds Statement of Cash Flows

Question 8

If a tax-exempt organization is found by the IRS to have paid excessive benefits, the organization must pay a tax penalty of 25% of the excess benefit and the employee must pay a 10% penalty, but the employee is entitled to keep the benefits.

Accepted Answer

A) True 
 B)False

Question 9

The Single Audit Act intends that auditors conducting regular financial audits of state and local governments and not-for-profits organizations provide assurance to the federal government that:

Accepted Answer

A)  Federal funds have been expended in accordance with laws and regulations 
B)  Federal funds are protected through a system of internal controls and sound financial management practices 
C)  Both A & B 
D)  None of the above 
A)  Federal funds have been expended in accordance with laws and regulations 
B)  Federal funds are protected through a system of internal controls and sound financial management practices 
C)  Both A & B 
D)  None of the above

Question 10

A government publishes information about its fire department. What type of service efforts and accomplishments measure would Fire Loss per Capita represent?

Accepted Answer

A)  Input 
B)  Output 
C)  Outcome 
D)  Efficiency 
A)  Input 
B)  Output 
C)  Outcome 
D)  Efficiency

Question 11

What is the purpose of the Unrelated Business Income Tax?

Accepted Answer

Not-for-profits performing business acti

Question 12

Which of the following is a governmental audit that is concerned with examining, reviewing or performing agreed upon procedures on a subject matter of an assertion and reporting on the results.

Accepted Answer

A)  Financial Audit 
B)  Attestation Engagement 
C)  Performance Audits 
D)  Nonaudit Services 
A)  Financial Audit 
B)  Attestation Engagement 
C)  Performance Audits 
D)  Nonaudit Services

Question 13

To apply for tax-exempt status, a non-profit organization must file:

Accepted Answer

A)  IRS Form 501(c)(3) 
B)  IRS Form 990 
C)  IRS Form 1023 
D)  None of the above 
A)  IRS Form 501(c)(3) 
B)  IRS Form 990 
C)  IRS Form 1023 
D)  None of the above

Question 14

If an auditor is not independent which type of audit opinion is appropriate?

Accepted Answer

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

Question 15

Which of the following is not true of Tax Exempt Entities?

Accepted Answer

A)  Even though they are tax exempt entities they must still file a tax return 
B)  They have to report income that is unrelated to the organization 
C)  They have Retained Earnings in the equity section of financial statements 
D)  Tax exempt entities get an automatic $1,000 deduction in Unrelated Business. Income 
A)  Even though they are tax exempt entities they must still file a tax return 
B)  They have to report income that is unrelated to the organization 
C)  They have Retained Earnings in the equity section of financial statements 
D)  Tax exempt entities get an automatic $1,000 deduction in Unrelated Business. Income

Question 16

The use of opinion units allows an auditor to issue different opinions on different statements, instead of issuing one opinion.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is true regarding the Internal Revenue Service's concern regarding tax-exempt organizations?

Accepted Answer

A)  Organizations are charging many of their program expenses to fundraising 
B)  Executives of tax-exempt organizations are receiving excessive salaries and benefits 
C)  Both (a) and (b) 
D)  Neither (a) nor (b) 
A)  Organizations are charging many of their program expenses to fundraising 
B)  Executives of tax-exempt organizations are receiving excessive salaries and benefits 
C)  Both (a) and (b) 
D)  Neither (a) nor (b)

Question 18

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 19

Tax-exempt organizations are required to file Form 990 by the 15th day of the 5th month following the organization's taxable year.

Accepted Answer

A) True 
 B)False

Question 20

What are major programs with respect to the Single Audit Act of 1984 and amendment of 1996? Distinguish between Type A and Type B programs.

Accepted Answer

A major program is one that is selected

Which of the following is true regarding the Single Audit Act and its amendments?

Entities that are tax exempt under IRS Section 501(c)3 are prohibited from having surpluses (revenues exceed expenses).

The Government Accountability Office has authority for issuing Governmental Auditing Standards.

The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund raising to program expenses.

Under the terms of the Single Audit Act and its amendments, what percentage of federal awards expenditures must be selected for audit?

List four sources of income that is not subject to the unrelated business income tax?

In order to compute the operating ratio-enterprise funds, one would look in the CAFR in which of the following sections?

If a tax-exempt organization is found by the IRS to have paid excessive benefits, the organization must pay a tax penalty of 25% of the excess benefit and the employee must pay a 10% penalty, but the employee is entitled to keep the benefits.

The Single Audit Act intends that auditors conducting regular financial audits of state and local governments and not-for-profits organizations provide assurance to the federal government that:

A government publishes information about its fire department. What type of service efforts and accomplishments measure would Fire Loss per Capita represent?

What is the purpose of the Unrelated Business Income Tax?

Which of the following is a governmental audit that is concerned with examining, reviewing or performing agreed upon procedures on a subject matter of an assertion and reporting on the results.

To apply for tax-exempt status, a non-profit organization must file:

If an auditor is not independent which type of audit opinion is appropriate?

Which of the following is not true of Tax Exempt Entities?

The use of opinion units allows an auditor to issue different opinions on different statements, instead of issuing one opinion.

Which of the following is true regarding the Internal Revenue Service's concern regarding tax-exempt organizations?

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.

Tax-exempt organizations are required to file Form 990 by the 15^th day of the 5^th month following the organization's taxable year.

What are major programs with respect to the Single Audit Act of 1984 and amendment of 1996? Distinguish between Type A and Type B programs.

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 Trust Funds

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

Filters

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

Which of the following is true regarding the Single Audit Act and its amendments?

Entities that are tax exempt under IRS Section 501(c)3 are prohibited from having surpluses (revenues exceed expenses).

The Government Accountability Office has authority for issuing Governmental Auditing Standards.

The program expense ratio for a not-for-profit organization will improve if the organization shifts costs from fund raising to program expenses.

Under the terms of the Single Audit Act and its amendments, what percentage of federal awards expenditures must be selected for audit?

List four sources of income that is not subject to the unrelated business income tax?

In order to compute the operating ratio-enterprise funds, one would look in the CAFR in which of the following sections?

If a tax-exempt organization is found by the IRS to have paid excessive benefits, the organization must pay a tax penalty of 25% of the excess benefit and the employee must pay a 10% penalty, but the employee is entitled to keep the benefits.

The Single Audit Act intends that auditors conducting regular financial audits of state and local governments and not-for-profits organizations provide assurance to the federal government that:

A government publishes information about its fire department. What type of service efforts and accomplishments measure would Fire Loss per Capita represent?

What is the purpose of the Unrelated Business Income Tax?

Which of the following is a governmental audit that is concerned with examining, reviewing or performing agreed upon procedures on a subject matter of an assertion and reporting on the results.

To apply for tax-exempt status, a non-profit organization must file:

If an auditor is not independent which type of audit opinion is appropriate?

Which of the following is not true of Tax Exempt Entities?

The use of opinion units allows an auditor to issue different opinions on different statements, instead of issuing one opinion.

Which of the following is true regarding the Internal Revenue Service's concern regarding tax-exempt organizations?

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.

Tax-exempt organizations are required to file Form 990 by the 15th day of the 5th month following the organization's taxable year.

What are major programs with respect to the Single Audit Act of 1984 and amendment of 1996? Distinguish between Type A and Type B programs.

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 Trust Funds

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

Filters

Tax-exempt organizations are required to file Form 990 by the 15^th day of the 5^th month following the organization's taxable year.