Deck 14: Auditing Governments and Not-For-Profit Organizations

Question 1

A single audit has two main components: an audit of the financial statements and an audit of federal financial awards.

Answer 1

True

Question 2

The Single Audit Act applies to organizations receiving more than $500,000 in federal assistance under more than one program be subject to a single audit.

Answer 2

True

Question 3

The Yellow Book's general standards are issued by the a.GAO
B)FASB
C)AICPA
D)IRS

Answer 3

A

Question 4

GAO standards do not mandate a peer review process for audit organizations.

Question 5

In discerning the objectives of a program to be audited, the auditors should give the least credibility to a.the legislation creating the program
B)the organization's program budget
C)the organization's mission statement and strategic plan
D)comments by the lower-level employees who actually depend on the program for their livelihoods.

Question 6

In a single audit, auditors are expected to provide an opinion on the financial statements and on the schedule of expenditures of federal awards.

Question 7

Government Auditing Standards characterizes government engagements into which of the following three categories? a.financial audits, compliance audits, and performance audits
B)financial audits, operational audits, and performance audits
C)financial audits, attest engagements, and performance audits
D)financial audits, efficiency and effectiveness audits, and compliance audits

Question 8

In 1972, the GAO issued Government Auditing Standards known as the Blue Book.

Question 9

''Generally accepted government auditing standards'' (GAGAS)refers to standards incorporated in a.the Yellow Book
B)the Yellow Book and OMB Circular A-133
C)the Yellow Book and the AICPA's Professional Standards
D)the Yellow Book OMB Circular A-133, and the AICPA's Professional Standards

Question 10

Government Auditing Standards must be adhered to in all financial audits except of a.state and local governments
B)federal agencies
C)federally chartered banks
D)public corporations

Question 11

Performance audits may be conducted by staff without training in accounting.

Question 12

Which of the following is not reported upon in the Schedule of Findings and Questioned Costs? a.reportable conditions related to internal control
B)material noncompliance with provisions of laws, regulations, contracts, or grant agreements
C)material examples of inefficiency and ineffectiveness in carrying out federally funded programs
D)federally reimbursed expenditures that are not adequately documented

Question 13

Performance audits are most commonly conducted by external auditors.

Question 14

The purpose of this is to avoid duplication of efforts in conducting governmental audits a.AICPA's Professional Standards
B)GAO's Government Auditing Standards
C)Single Audit Act
D)OMB Circular A-133

Question 15

The Sarbanes-Oxley Act has had no impact on governmental auditing.

Question 16

Which of the following statements is incorrect about GAO standards pertaining to performance audits? a.The GAO mandates that programs be audited annually by accounting trained professionals
B)Performance audits are normally carried out by internal audit departments
C)Performance audits focus on specific programs
D)The GAO does not specify when and how often a program, must be audited

Question 17

In reporting the results of a performance audit, it is appropriate for the auditors to a.conjecture as to the reasons for the program's failure to achieve desired results
B)include the auditors' response to management's objections to the auditors' findings
C)provide recommendations as to how the program can be improved
D)all of the above.

Question 18

Agencies that provide funds to governments may stipulate that the audit be conducted in accordance with generally accepted government auditing standards (GAGAS).

Question 19

Performance audits are intended to determine whether an entity's financial statements are presented fairly in accordance to GAAP.

Question 20

Which of the following is not a General Auditing Standard for financial audits? a.professional judgment
B)financial stability
C)independence
D)competence

Question 21

Which of the following is a Yellow Book standard in respect to independence? a.auditors may only audit one government agency during a fiscal year
B)auditors should not audit their own work
C)auditors may not advise in respect to computer installation
D)auditors may not audit public corporations

Question 22

Federal funds must be used only for activities that are within the scope of the grant would be a(n) a.optional activity
B)Yelllow Book mandate
C)allowable activity
D)prohibited activity

Question 23

Per the GAO standards, an auditor's working papers must a.be made public unless they contain information that would be harmful to national security
B)contain sufficient information to convince an auditor having no previous connection with the audit that the evidence supports the auditor's conclusions and judgments
C)be retained by the auditor for a period of no less than 10 years
D)include documentation that the individual auditors on the engagement have satisfied the standards' continuing professional education requirements

Question 24

This law requires that the wages of laborers and mechanics employed by the contractors of federally funded projects be paid at prevailing local wage rates. a.Davis-Bacon Act
B)Sarbanes-Oxley Act
C)Federal Wage and Hour Law
D)IRS Act

Question 25

The process of specifically directing federal funds to a particular program is called: a.allocation
B)earmarking
C)identification
D)subversion