Question 1

Governments must have a means to finance public services, with the primary means being taxation. All of the following are the primary methods of revenue generation in public administration EXCEPT:

Accepted Answer

A)  Taxation, this includes federal and state income taxes, along with sales and property taxes. 
B)  User charges - as individuals become increasingly less receptive to taxes, user fees or charges have been used to finance some services. 
C)  Employee charges 
D)  Transfer payments - State and local governments receive transfer payments from the federal government.

Question 2

One mechanism to help ensure the proper application of audit standards is through ____________. The purpose of _______________ is to provide feedback to management on the effectiveness of the quality control policies and procedures of an organization:

Accepted Answer

A)  An external quality review process 
B)  An internal quality review process 
C)  Organizational review process 
D)  Audit review process

Question 3

The purpose of __________ is to promote an ethical culture in the profession of internal auditing. A ___________ is necessary and appropriate for the profession of internal auditing, founded as it is on the trust placed in its objective assurance about risk management, control, and governance:

Accepted Answer

A)  Code of ethics, The IIA's Code of Ethics 
B)  The IIA's Code of Ethics, Code of ethics 
C)  Code of ethics, PPF Code of Ethics 
D)  PPF Code of Ethics, Code of ethics

Question 4

_________ are a contracting method employing competitive undisclosed bids, public bid opening, and awards contracts when:

Accepted Answer

A)  Sealed bids 
B)  Open bids 
C)  None of the above 
D)  All of the above

Question 5

Privatization can be defined as the process of returning to the private sector property or functions previously owned or performed by government. All of the Following are basic forms of government privatization EXCEPT:

Accepted Answer

A)  Sale of government assets (such as selling public housing units to tenants). 
B)  Private financing of public facilities (examples are toll highways in Virginia and California). 
C)  Voucher privatization - shares of ownership are distributed to all citizens, usually for free or at a very low price. 
D)  Private provision of services (such as trash collection, prisons, or auditing).

Question 6

Who control the operation of the computer system and for the efficient use of computer resources which is responsible?

Accepted Answer

A)  software programmer 
B)  the smart programmer 
C)  system programmers 
D)  the smart-and-gets-things-done programmer

Question 7

The application of the appropriate audit standards is dependent on all of the following issues EXCEPT:

Accepted Answer

A)  Laws and policies of the audit organization. 
B)  Regulations 
C)  Audit requirements 
D)  External control requirement

Question 8

All of the following are the goals of a well-functioning group EXCEPT:

Accepted Answer

A)  The group should make decisions based on sound logic and evidence. Input from all group members, regardless of rank or experience level, should be heard and evaluated fairly. 
B)  Achieving the overall goals of the group should not be the priority of all group members. 
C)  The group should recognize that individuals have different strengths and weaknesses. Roles and assignments of group members should take these strengths and weakness into account. 
D)  Time should be spent solving major problems instead of petty personal conflicts and concers.

Question 9

Freedom of information legislation has set the tone for public officials that all decisions and actions are subject to review. ________and ________require that all official meetings are publicized and the general public is invited so that individuals interested in public affairs might attend.

Accepted Answer

A)  Regulatory laws and open meetings acts 
B)  Sunshine laws and open meetings acts 
C)  Property laws and open meetings acts 
D)  Sunshine laws and closed meetings acts

Question 10

All of the following are guidelines for effective personnel management EXCEPT:

Accepted Answer

A)  Plan for personnel needs and review hiring results periodically to determine whether personnel needs are being achieved. 
B)  Estimate the significance of a risk (magnitude of exposure in dollars or other type of measure, type of threat, duration, etc.) 
C)  Provide continuing education and training for staff (external or in-house training courses, professional conferences, or seminars). 
D)  Develop procedures to identify sources of potential hires, methods of contacting and attracting potential hires, and methods of evaluating and selecting potential hires.

Question 11

The characteristics of ____________ will vary based on the _____ of the audit unit and the nature of its work. Where as The frequency of required quality assurance reviews varies based on the _____ of standards followed.

Accepted Answer

A)  Internal quality control systems, size, type 
B)  External quality control systems, size, type 
C)  External quality control systems, quality, type 
D)  Internal quality control systems, length, type

Question 12

The most common form of service delivery is via government employees. It is this approach that has created bureaucracies at the national, regional, and, in some cases, local level. All of the following given below are some of the advantages of direct delivery of services by government employees EXCEPT:

Accepted Answer

A)  Existing government employees might be expected to have a more thorough understanding of program objectives than a private-sector contractor hired for a one-year contract. 
B)  Often viewed as a more economical approach (for example, a new program is assigned to existing staff and indirect costs are not included in the analysis). 
C)  Increased lead time for deployment of new programs as internal staff resources are allocated among current and proposed programs. 
D)  Existing government employees might be expected to have increased knowledge of government regulations and requirements and the environment surrounding the program.

Question 13

Project management involves the considerations and activities audit managers undertake when conducting an audit. A _______ is defined as an endeavor in which resources are organized to undertake a unique scope of work, of a given specification, within the constraints of cost and time, so as to achieve a change defined by quantitative and qualitative objectives.

Accepted Answer

A)  Business plan 
B)  Audit plan 
C)  Tactical plans 
D)  Project

Question 14

All of the following are questions auditors may ask when testing controls of safeguards over assets and records please choose the correct option:

Accepted Answer

A)  Is confidential or sensitive information kept separate from other records? 
B)  Does management provide a favorable control environment in the organization? 
C)  Does adequate physical security exist over assets and records? Are storerooms locked? Are equipment and inventories properly recorded? Are there adequate environmental controls over assets (e.g., appropriate temperature)? 
D)  Only A & C

Question 15

_______considers the processes associated with the program or factors in the program environment to determine which components adversely affect effectiveness or do not add value to the program's goals.

Accepted Answer

A)  Summative program evaluations 
B)  performance program evaluations 
C)  employee's program evaluation 
D)  Formative program evaluation

Question 16

____________is the Risk in any activity, regardless of the existence or effectiveness of controls. Where as ___________is the extent of uncertainty remaining after the mitigating effects of the control system are in place. The extent to which an organization has implemented controls to minimize the actual occurrence of the risk determines the vulnerability to the risk actually occurring.

Accepted Answer

A)  Potential risk, quality risk 
B)  Inherent risk, control risk 
C)  Control risk, quality risk 
D)  Internal risk, control risk

Question 17

Beneficiaries are people who may never read the audit report, but whose services are improved because the audit was conducted. All of the following are examples of beneficiaries EXCEPT:

Accepted Answer

A)  General public. 
B)  Clients of the audited program. 
C)  Special interest groups (e.g., consumer advocacy groups, social service organizations, industry and trade groups, etc.). 
D)  Clients of the audited program and general public.

Question 18

Capital budgeting is often based on the issuance of capital debt. Capital debt (based on GASB 11) includes all of the following debt that are issued EXCEPT:

Accepted Answer

A)  Finance the acquisition or construction of fixed assets reported on the balance sheet. 
B)  No Refund existing capital debt. 
C)  Finance capital grants to other governments. 
D)  Finance certain nonrecurring projects or activities that have a long-term economic benefit.

Question 19

All of the following are the standards common to auditors and SAIs EXCEPT:

Accepted Answer

A)  The auditor and the SAI must not be independent. 
B)  The auditor and the SAI must possess the required competence. 
C)  The auditor and the SAI must be independent. 
D)  The auditor and the SAI must exercise due care and concern in complying with the INTOSAI auditing standards.

Question 20

The primary purpose of _______ was to promote planning activities. Where as _________ was developed to alleviate this problem by reevaluating the complete budget and starting from zero on each new budget year.

Accepted Answer

A)  Zero-based budgeting, program budgeting 
B)  Program budgeting, Zero-based budgeting 
C)  Zero-based Budget, Integrated Budget 
D)  Program Budget, Executive Budget

Exam 2: Certified Government Auditing Professional