Question 1

The program expense ratio is calculated as follows:
A) Program service expenses / Total expenses
B) Program service expenses + supporting service expenses / Total expenses
C) Total expenses / Program service expenses
D) Total expenses / Program service expenses + supporting service expenses

Accepted Answer

The answer of The program expense ratio is calculated as...

Question 2

Which of the following is true concerning tax exempt organizations with unrelated business income?
A) They may deduct all expenses in computing their tax liability
B) They may deduct the first $1,000 of unrelated business income
C) They file a 1040-NFP with the IRS
D) They must include investment income in computing their tax liability

Accepted Answer

The answer of Which of the following is true concerning...

Question 3

Government auditing standards are commonly known as:
A) The Green Book
B) The Blue Book
C) The Red book
D) The Yellow book

Accepted Answer

The Yellow Book is the commonly known name for Government Auditing Standards.

Question 4

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) 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

Accepted Answer

The Single Audit Act requires auditors to provide assurance that federal funds have been expended in accordance with laws and regulations and that they are protected through a system of internal controls and sound financial management practices. Therefore, both options A and B are correct.

Question 5

Currently, a single audit is required for organizations receiving what amount of money of federal funds?
A) > $100,000
B) > $300,000
C) > $500,000
D) > $700,000

Accepted Answer

Currently, a single audit is required for organizations receiving more than $500,000 of federal funds.

Question 6

In a governmental audit the auditor:
A) Is required to report directly to appropriate officials in addition to the board or audit committee
B) Is only required to report to the board or audit committee
C) Is only required to report directly to the appropriate officials
D) None of the above

Accepted Answer

In a governmental audit, the auditor is required to report directly to appropriate officials in addition to the board or audit committee. This is because government entities have a wider range of stakeholders and reporting requirements than typical businesses. The auditor must ensure that all relevant parties are informed of the audit results and any necessary actions. Therefore, option A is the most accurate answer.

Question 7

What organization oversees the Governmental Auditing Standards?
A) Governmental Accountability Office
B) Financial Accounting Standards Board
C) AICPA
D) Government Accounting Oversight Committee

Accepted Answer

The Governmental Accountability Office (GAO) is responsible for overseeing the Governmental Auditing Standards (GAS). GAO is an independent agency that provides auditing, evaluation, and investigative services for the United States Congress. The GAS are a set of standards that provide guidelines for auditors to follow when conducting audits of government entities.

Question 8

Describe the types of audit opinions that may be issued on a governmental or not-for-profit financial report.

Accepted Answer

The answer of Describe the types of audit opinions that...

Question 9

Government financial audits must comply with the following:
A) Generally Accepted Auditing Standards
B) Government Auditing Standards
C) Both A and B
D) Generally Accepted Accounting Principles

Accepted Answer

Government financial audits must comply with both Generally Accepted Auditing Standards (GAAS) and Government Auditing Standards (GAS). GAAS provides a framework of standards and guidelines for auditors when conducting audits of financial statements, while GAS provides additional guidance specific to audits of governmental entities. Generally Accepted Accounting Principles (GAAP) are guidelines for financial accounting and reporting, and are not directly related to the auditing process.

Question 10

To qualify for tax-exempt status, an organization must do all of the following except:
A) Have an Employer's Identification Number
B) Be organized as a corporation, trust or association
C) Complete IRS form 1023
D) Support political candidates

Accepted Answer

Organizations that support political candidates are not eligible for tax-exempt status.

Question 11

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 12

Describe the different types of governmental audit and attestation engagements.

Accepted Answer

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

Question 13

What is the objective of the single audit process?

Accepted Answer

The answer of What is the objective of the single...

Question 14

A measure of performance that expresses how much an organization expends in raising the dollar of donations.
A) Fundraising efficiency
B) Program expense ratio
C) Working capital ratio
D) None of the above

Accepted Answer

Fundraising efficiency measures how much an organization spends to raise each dollar of donations, making it the best choice among the options given. Program expense ratio measures the proportion of an organization's expenses that go toward its programs, while working capital ratio measures an organization's ability to pay off its short-term debts.

Question 15

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

The answer of What are major programs with respect to...

Question 16

What is an "opinion unit" and what are the five opinion units for state and local governments?

Accepted Answer

The answer of What is an "opinion unit" and what...

Question 17

What factors would cause income that would otherwise qualify as unrelated business income to not be taxed?

Accepted Answer

The answer of What factors would cause income that would...

Question 18

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

Accepted Answer

The answer of Which of the following is not true...

Question 19

Organizations exempt under section 501(c)(3) of the Internal Revenue code are required to file Form 990 or in some cases an alternate form by the 15^th day of which month? A) The 9^th month following the taxable year of the organization B) The 3^rd month of the calendar year C) The 5^th month following the taxable year of the organization D) The month in which the organization originally filed

Accepted Answer

Organizations exempt under section 501(c)(3) of the Internal Revenue code are required to file Form 990 or an alternate form by the 15th day of the 5th month following the taxable year of the organization.

Question 20

Which of the following is not a governmental audit opinion unit?
A) Governmental activities
B) Business-type activities
C) Each Major Fund
D) All of the above are opinion units

Accepted Answer

All of the above are opinion units, meaning that all three (governmental activities, business-type activities, and each major fund) are considered by a governmental audit opinion unit.

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

The program expense ratio is calculated as follows:

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

Government auditing standards are commonly known as:

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:

Currently, a single audit is required for organizations receiving what amount of money of federal funds?

In a governmental audit the auditor:

What organization oversees the Governmental Auditing Standards?

Describe the types of audit opinions that may be issued on a governmental or not-for-profit financial report.

Government financial audits must comply with the following:

To qualify for tax-exempt status, an organization must do all of the following except:

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

Describe the different types of governmental audit and attestation engagements.

What is the objective of the single audit process?

A measure of performance that expresses how much an organization expends in raising the dollar of donations.

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.

What is an "opinion unit" and what are the five opinion units for state and local governments?

What factors would cause income that would otherwise qualify as unrelated business income to not be taxed?

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

Organizations exempt under section 501(c) (3) of the Internal Revenue code are required to file Form 990 or in some cases an alternate form by the 15^th day of which month?

Which of the following is not a governmental audit opinion unit?

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

The program expense ratio is calculated as follows:

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

Government auditing standards are commonly known as:

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:

Currently, a single audit is required for organizations receiving what amount of money of federal funds?

In a governmental audit the auditor:

What organization oversees the Governmental Auditing Standards?

Describe the types of audit opinions that may be issued on a governmental or not-for-profit financial report.

Government financial audits must comply with the following:

To qualify for tax-exempt status, an organization must do all of the following except:

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

Describe the different types of governmental audit and attestation engagements.

What is the objective of the single audit process?

A measure of performance that expresses how much an organization expends in raising the dollar of donations.

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.

What is an "opinion unit" and what are the five opinion units for state and local governments?

What factors would cause income that would otherwise qualify as unrelated business income to not be taxed?

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

Organizations exempt under section 501(c) (3) of the Internal Revenue code are required to file Form 990 or in some cases an alternate form by the 15th day of which month?

Which of the following is not a governmental audit opinion unit?

Organizations exempt under section 501(c) (3) of the Internal Revenue code are required to file Form 990 or in some cases an alternate form by the 15^th day of which month?