Question 1

In a governmental audit the auditor is only required to report to the board or audit committee.

Accepted Answer

A) True 
 B)False

Question 2

How is the Unrelated Business Income Tax computed?

Accepted Answer

The answer of How is the Unrelated Business Income Tax...

Question 3

Assuming an auditee is not considered low-risk,the auditor is required to express an opinion on compliance on major programs,which must add up to 50 percent of federal funds expended by the auditee.

Accepted Answer

A) True 
 B)False

Question 4

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 50 percent of federal funds expended by the auditee.

Accepted Answer

A) True 
 B)False

Question 5

The GASB has issued standards for Service Efforts and Accomplishments Reporting.

Accepted Answer

A) True 
 B)False

Question 6

When computing Unrelated Business Income Tax,charities are permitted to deduct ordinary and necessary business related expenses and the first $1,000 of income is not taxed.

Accepted Answer

A) True 
 B)False

Question 7

The highest bond rating assigned by Moody's is:

Accepted Answer

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

Question 8

Service Efforts and Accomplishments Reporting includes measures of service inputs,outputs and outcomes.

Accepted Answer

A) True 
 B)False

Question 9

To apply for tax-exempt status,an organization must complete an IRS Form 1023.

Accepted Answer

A) True 
 B)False

Question 10

Entities receiving $ 500,000 or more of federal funds are generally required to have a single audit.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following would be considered a performance audit under the Government Auditing Standards?

Accepted Answer

A)  An investigation into whether a purchasing department of a government was operated efficiently. 
B)  An investigation into whether a social service agency of a state government improved the lives of its clients. 
C)  Both A and B above. 
D)  Neither A nor B above.

Question 12

Service Efforts and Accomplishments Reporting is mandatory for government organizations.

Accepted Answer

A) True 
 B)False

Question 13

Describe the different types of governmental audit and attestation engagements.

Accepted Answer

The answer of Describe the different types of governmental audit...

Question 14

A tax-exempt organization must pay income taxes on income generated from trade or business activities unrelated to the entity's tax-exempt purposes.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is true concerning tax-exempt organizations with unrelated business income?

Accepted Answer

A)  They may deduct the first $1,000 of unrelated business income. 
B)  They must include income from donated merchandise. 
C)  They must include investment income in computing their tax liability. 
D)  All of the above are true.

Question 16

The program expense ratio is calculated as follows:
 Total expenses / (Program service expenses + supporting service expenses).

Accepted Answer

A) True 
 B)False

Question 17

The purpose of the Unrelated Business Income Tax is to eliminate advantages that tax-exempt organizations have over commercial enterprises providing goods or services for sale.

Accepted Answer

A) True 
 B)False

Question 18

If a government failed to report infrastructure assets,the auditor could still express an unqualified opinion on the fund level financial statements.

Accepted Answer

A) True 
 B)False

Question 19

A tax-exempt organization is required to pay income taxes on

Accepted Answer

A)  Profit that is earned. 
B)  Unrelated business income. 
C)  Investment gains or losses. 
D)  Contributions received.

Question 20

What is required for an organization to qualify for tax-exempt status?

Accepted Answer

The answer of What is required for an organization to...

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

In a governmental audit the auditor is only required to report to the board or audit committee.

How is the Unrelated Business Income Tax computed?

Assuming an auditee is not considered low-risk,the auditor is required to express an opinion on compliance on major programs,which must add up to 50 percent of federal funds expended by the auditee.

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 50 percent of federal funds expended by the auditee.

The GASB has issued standards for Service Efforts and Accomplishments Reporting.

When computing Unrelated Business Income Tax,charities are permitted to deduct ordinary and necessary business related expenses and the first $1,000 of income is not taxed.

The highest bond rating assigned by Moody's is:

Service Efforts and Accomplishments Reporting includes measures of service inputs,outputs and outcomes.

To apply for tax-exempt status,an organization must complete an IRS Form 1023.

Entities receiving $ 500,000 or more of federal funds are generally required to have a single audit.

Which of the following would be considered a performance audit under the Government Auditing Standards?

Service Efforts and Accomplishments Reporting is mandatory for government organizations.

Describe the different types of governmental audit and attestation engagements.

A tax-exempt organization must pay income taxes on income generated from trade or business activities unrelated to the entity's tax-exempt purposes.

Which of the following is true concerning tax-exempt organizations with unrelated business income?

The program expense ratio is calculated as follows: Total expenses / (Program service expenses + supporting service expenses).

The purpose of the Unrelated Business Income Tax is to eliminate advantages that tax-exempt organizations have over commercial enterprises providing goods or services for sale.

If a government failed to report infrastructure assets,the auditor could still express an unqualified opinion on the fund level financial statements.

A tax-exempt organization is required to pay income taxes on

What is required for an organization to qualify for tax-exempt status?