Question 1

Service Efforts and Accomplishments Reporting is best completed by using a variety of measures,which are reported consistently.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following provisions of the Sarbanes-Oxley Act already existed in governmental auditing standards?

Accepted Answer

A)  Auditors are required to report deficiencies in the design or operation of internal controls. 
B)  Not-for-profit organizations are required to establish audit committees composed of non-management board members. 
C)  All nonaudit services performed by the auditors must be approved by the audit committee. 
D)  All of the above

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

To compute the operating ratio-enterprise funds,one would need to look in the CAFR for the:

Accepted Answer

A)  Government-wide Statement of Net Assets. 
B)  Proprietary funds Statement of Revenues, Expenses, and Changes in Fund Net Assets. 
C)  Both of the above. 
D)  Neither of the above.

Question 5

Tax exempt organizations are required to pay tax at the corporate or trust rate on the income generated from any trade or business activities unless the money is used to carry out the entity's tax-exempt purposes.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

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

Question 7

Public sector audits differ from those of commercial businesses in which of the following ways?

Accepted Answer

A)  The auditor is not required to be independent. 
B)  The auditor reports to outside agencies as well as management of the organization. 
C)  Auditor do not use sampling. 
D)  All of the above.

Question 8

Service Efforts and Accomplishments Reporting is best completed by using

Accepted Answer

A)  A standard single measure to evaluate or present information 
B)  A variety of measures which vary from year to year in order to evaluate and present information 
C)  Only the information that is favorable to the organization 
D)  A variety of measures which are consistent from year to year

Question 9

In order to compute the interest coverage on revenue bonds,one would look in the CAFR at the:

Accepted Answer

A)  Government-wide Statement of Activities. 
B)  Enterprise funds Statement of Revenues, Expenses, and Changes in Net Assets. 
C)  Budgetary Comparison Schedule. 
D)  Government-wide Statement of Activities

Question 10

Government auditing standards are commonly known as:

Accepted Answer

A)  The Green Book 
B)  The Blue Book 
C)  The Red book 
D)  The Yellow book

Question 11

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

Accepted Answer

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

Question 12

While the principal users of corporate audit reports are investors and creditors,the main user of Single Audit reports is the federal government.

Accepted Answer

A) True 
 B)False

Question 13

A disclaimer of opinion is the appropriate audit opinion when the auditor is not independent.

Accepted Answer

A) True 
 B)False

Question 14

Tax-exempt organizations are required to disclose the compensation of its officers,directors,trustees and highest paid employees and independent contractors.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Which of the following is not correct regarding executive compensation at tax-exempt organizations?

Accepted Answer

A)  If the IRs deems wages and benefits to be in excess of reasonable amounts, the IRs may impose sanctions on the individual receiving the benefits. 
B)  If the IRs deems wages and benefits to be in excess of reasonable amounts, the IRs may impose sanctions on the managers who approved the wages and benefits. 
C)  If the compensation is found to be unreasonable, the executive is required to pay back the amount of compensation deemed excessive plus a 10% penalty. 
D)  Benefits include salaries, deferred compensation, insurance, loans and medical benefits.

Question 17

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

Accepted Answer

A)  Financial Audit 
B)  Attestation Engagement 
C)  Performance Audit 
D)  Nonaudit services

Question 18

The purpose of audits conducted under the Single Audit Act is to provide assurance that federal and state funds are expended in accordance with grant agreements,and with financial management and other standards promulgated by the federal government.

Accepted Answer

A) True 
 B)False

Question 19

A ratio that measures solvency is:

Accepted Answer

A)  Net assets/expenses 
B)  Program expense ratio 
C)  Net debt to assets 
D)  Fundraising efficiency

Question 20

How is the Unrelated Business Income Tax computed?

Accepted Answer

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

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

Service Efforts and Accomplishments Reporting is best completed by using a variety of measures,which are reported consistently.

Which of the following provisions of the Sarbanes-Oxley Act already existed in governmental auditing standards?

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

To compute the operating ratio-enterprise funds,one would need to look in the CAFR for the:

Tax exempt organizations are required to pay tax at the corporate or trust rate on the income generated from any trade or business activities unless the money is used to carry out the entity's tax-exempt purposes.

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

Public sector audits differ from those of commercial businesses in which of the following ways?

Service Efforts and Accomplishments Reporting is best completed by using

In order to compute the interest coverage on revenue bonds,one would look in the CAFR at the:

Government auditing standards are commonly known as:

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

While the principal users of corporate audit reports are investors and creditors,the main user of Single Audit reports is the federal government.

A disclaimer of opinion is the appropriate audit opinion when the auditor is not independent.

Tax-exempt organizations are required to disclose the compensation of its officers,directors,trustees and highest paid employees and independent contractors.

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

Which of the following is not correct regarding executive compensation at tax-exempt organizations?

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

The purpose of audits conducted under the Single Audit Act is to provide assurance that federal and state funds are expended in accordance with grant agreements,and with financial management and other standards promulgated by the federal government.

A ratio that measures solvency is:

How is the Unrelated Business Income Tax computed?