Question 1

To compute the net debt per capita,a user of financial statements would need to look at (in the CAFR):

Accepted Answer

A)  the debt in the government-wide Statement of Net Assets, the amount available to pay that debt in the governmental funds Balance Sheet, and the population from the statistical section. 
B)  the debt and the amount available to pay that debt in the governmental funds Balance Sheet, and the population from the statistical section. 
C)  the debt in the governmental funds Balance Sheet, the amount available in the government-wide Statement of Net Assets, and the population from the statistical section. 
D)  all three items from the government-wide Statement of Net Assets.

Question 2

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

Question 3

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%

Question 4

How has the Sarbanes-Oxley Act of 2002 affected the practices of not-for-profit and governmental organizations?
 Why have these provisions been adopted?

Accepted Answer

The answer of How has the Sarbanes-Oxley Act of 2002...

Question 5

Government Auditing Standards,published in a document called the Yellow Book incorporate the AICPA standards and provide extensions that are necessary due to the unique nature of public entities.Which of the following is not one of the extensions?

Accepted Answer

A)  Requirement that auditors have knowledge of government accounting and auditing 
B)  Higher materiality thresholds than in the private sector 
C)  Public availability of audit reports 
D)  Written evaluation of internal controls

Question 6

Bonds which carry the full faith and credit of a government are called general obligation bonds.

Accepted Answer

A) True 
 B)False

Question 7

Fundraising efficiency is a measure of performance that expresses how much an organization spends in raising a dollar of donations.

Accepted Answer

A) True 
 B)False

Question 8

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.

Accepted Answer

A) True 
 B)False

Question 9

If an auditee is not considered low-risk,what percent of federal funds expended are auditors required to express an opinion on?

Accepted Answer

A)  100% 
B)  70% 
C)  50% 
D)  25%

Question 10

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 of the above 
D)  Neither of the above

Question 11

Attestation engagements must comply with the Government Auditing Standards but are exempt from compliance with the AICPA's attestation standards.

Accepted Answer

A) True 
 B)False

Question 12

All of the following are examples of service outputs,except:

Accepted Answer

A)  Enrollment increases 
B)  Dropout rates 
C)  The number of gifted or alternative programs 
D)  Degrees conferred

Question 13

The single audit act provides assurance to the federal government that federal funds are protected through a system of internal controls and sound financial management practices.

Accepted Answer

A) True 
 B)False

Question 14

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 15

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.

Question 16

Government financial audits are subject to both GAAS and GAGAS.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

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 entities do not have retained earnings in the equity section of their financial statements.

Accepted Answer

A) True 
 B)False

Question 20

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.

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

To compute the net debt per capita,a user of financial statements would need to look at (in the CAFR) :

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

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

How has the Sarbanes-Oxley Act of 2002 affected the practices of not-for-profit and governmental organizations? Why have these provisions been adopted?

Government Auditing Standards,published in a document called the Yellow Book incorporate the AICPA standards and provide extensions that are necessary due to the unique nature of public entities.Which of the following is not one of the extensions?

Bonds which carry the full faith and credit of a government are called general obligation bonds.

Fundraising efficiency is a measure of performance that expresses how much an organization spends in raising a dollar of donations.

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.

If an auditee is not considered low-risk,what percent of federal funds expended are auditors required to express an opinion on?

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

Attestation engagements must comply with the Government Auditing Standards but are exempt from compliance with the AICPA's attestation standards.

All of the following are examples of service outputs,except:

The single audit act provides assurance to the federal government that federal funds are protected through a system of internal controls and sound financial management practices.

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.

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

Government financial audits are subject to both GAAS and GAGAS.

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

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 entities do not have retained earnings in the equity section of their financial statements.

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: