Question 1

A common reason why a government might receive a "qualified opinion" from the external auditors is

Accepted Answer

A)   A violation of generally accepted accounting principles that does not cause material misstatement of the financial statements.
B)   A fund balance deficit in the General Fund.
C)   Poor internal controls such that the accounting records could not be audited.
D)   Liabilities exceed assets in the General Fund.

Question 2

A single audit conducted pursuant to the Single Audit Act Amendments of 1996 requires which of the following types of audits?

Accepted Answer

A)   Financial Audit: Yes; Performance Audit: No
B)   Financial Audit: No; Performance Audit: No
C)   Financial Audit: No; Performance Audit: Yes
D)   Financial Audit: Yes; Performance Audit: Yes

Question 3

Circumstances that could impair independence and therefore should be evaluated are called

Accepted Answer

A)   Material weaknesses.
B)   Significant deficiencies.
C)   Threats to independence.
D)   Reportable conditions.

Question 4

Since it is impossible to define every situation that creates threats to independence,the yellow book standards (i.e.,GAGAS)establish a conceptual framework that requires auditors to identify,evaluate,and apply safeguards to appropriately address threats to independence.

Accepted Answer

A) True 
 B)False

Question 5

When conducting a governmental financial statement audit,how does the auditor determine the appropriate auditing standards for the engagement?

Accepted Answer

The answer of When conducting a governmental financial statement audit,how...

Question 6

In which paragraph of the standard audit report does the auditor communicate to the user that certain combining fund information in the financial statements is not part of the basic financial statements,but that such information has been subjected to auditing procedures and,in his or her opinion,is fairly presented in all material respects in relation to the basic financial statements?

Accepted Answer

A)   Explanatory paragraph.
B)   Scope paragraph.
C)   Opening paragraph.
D)   Opinion paragraph.

Question 7

Performance audits provide findings or conclusions based on an evaluation of sufficient,appropriate evidence against criteria.

Accepted Answer

A) True 
 B)False

Question 8

Required supplementary information (RSI),such as the MD&A and budgetary comparison schedules,are covered under a financial statement audit.

Accepted Answer

A) True 
 B)False

Question 9

The opinion paragraph of the independent auditor's standard report states the auditor's opinion that the financial statements are free of errors.

Accepted Answer

A) True 
 B)False

Question 10

In the auditor's report the financial statements on which the opinion is being expressed are specified in the

Accepted Answer

A)   Introductory paragraph.
B)   Opinion paragraph.
C)   Scope paragraph.
D)   Explanatory paragraph.

Question 11

An auditor performing nonaudit work for a client may be in danger of violating the independence rules in Government Auditing Standards when he or she

Accepted Answer

A)   Conducts a search and recommends a particular person for a management position for the client.
B)   Provides advice on establishing or improving internal controls.
C)   Provides the client with benchmarking information.
D)   Answers technical questions for the client.

Question 12

All of the following reports are included in the reporting package resulting from the single audit except

Accepted Answer

A)   Financial statements and schedule of expenditures of federal awards.
B)   Summary schedule of prior audit findings.
C)   Report on efficiency and effectiveness.
D)   Corrective action plan.

Question 13

Which of the following would be considered Category (b) GAAP for state and local government auditees?

Accepted Answer

A)   AICPA Practice Bulletins if specifically made applicable to state and local governments by the AICPA and cleared by the GASB.
B)   GASB Technical Bulletins.
C)   GASB Statements and Interpretations.
D)   GASB Implementation Guides.

Question 14

Typical objectives of a performance audit include

Accepted Answer

A)   Determining whether financial statements fairly present the entity's operational results.
B)   Judging the appropriateness of an entity's program goals.
C)   Determining whether financial statements fairly present in conformity with GAAP.
D)   Assessing effectiveness and results,economy and efficiency,and internal controls and compliance with laws and regulations.

Question 15

Under a single audit

Accepted Answer

A)   An annual audit must be performed encompassing the nonfederal entity's financial statements and schedule of expenditures of federal awards.
B)   The audit must be conducted by an independent auditor in accordance with generally accepted government auditing standards (GAGAS) and cover the operations of the entire nonfederal entity.
C)   For each major program,the auditor must obtain an understanding of the internal controls pertaining to the compliance requirements for the program,assess control risk,and perform tests of controls,unless the controls are deemed to be ineffective.
D)   All of the above statements regarding a single audit are true.

Question 16

The following are key terms in Chapter 11 that relate to auditing of governmental and not-for-profit organizations:
A.Attestation engagement
B.Generally accepted auditing standards (GAAS)
C.Opinion units
D.Materiality
E.Financial audit
F.Generally accepted government auditing standards (GAGAS)
 G.Nonaudit work
 H.Performance audits

Accepted Answer

The key terms in Chapter 11 that relate ...

Question 17

Which of the following statements regarding generally accepted government auditing standards (GAGAS) is not true?

Accepted Answer

A)   GAGAS incorporate AICPA auditing standards and specifie additional general,performance,and reporting standards.
B)   GAGAS must be used on all audits of governmental entities.
C)   GAGAS are issued by the Government Accountability Office.
D)   GAGAS cover both financial and performance audits.

Question 18

If the auditor determines that the financial statements contain a departure from GAAP,the effect of which is material,or there has been a material change between periods in accounting principles,or in the method of their application,the auditor should express an unqualified opinion.

Accepted Answer

A) True 
 B)False

Question 19

Contrast and compare a financial audit to a performance audit,as defined in the GAO's Government Auditing Standards (yellow book).

Accepted Answer

A financial audit and a performance audi...

Question 20

The scope paragraph of an independent auditor's report on a financial audit of a local government

Accepted Answer

A)   Identifies the statutes the auditor determined to be relevant to the financial activities of the government.
B)   Identifies the financial statements that the auditor has examined.
C)   Identifies all applicable accounting records that were located and examined.
D)   Identifies the standards used in performing the audit.

Exam 11: Auditing of Governmental and Not-For-Profit Organizations

If the auditor determines that the financial statements contain a departure from GAAP,the effect of which is material,or there has been a material change between periods in accounting principles,or in the method of their application,the auditor should express an unqualified opinion.

Correct Answer
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All of the following reports are included in the reporting package resulting from the single audit except

Correct Answer
verified

Correct Answer
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Contrast and compare a financial audit to a performance audit,as defined in the GAO's Government Auditing Standards (yellow book).

Correct Answer
Answered by ExamLex AI
A financial audit and a performance audi...
View Answer

An auditor performing nonaudit work for a client may be in danger of violating the independence rules in Government Auditing Standards when he or she

Correct Answer
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Required supplementary information (RSI),such as the MD&A and budgetary comparison schedules,are covered under a financial statement audit.

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
The key terms in Chapter 11 that relate ...
View Answer

Under a single audit

Correct Answer
verified

A single audit conducted pursuant to the Single Audit Act Amendments of 1996 requires which of the following types of audits?

Correct Answer
verified

The scope paragraph of an independent auditor's report on a financial audit of a local government

Correct Answer
verified

Typical objectives of a performance audit include

Correct Answer
verified

A common reason why a government might receive a "qualified opinion" from the external auditors is

Correct Answer
verified

Since it is impossible to define every situation that creates threats to independence,the yellow book standards (i.e.,GAGAS)establish a conceptual framework that requires auditors to identify,evaluate,and apply safeguards to appropriately address threats to independence.

Correct Answer
verified

In the auditor's report the financial statements on which the opinion is being expressed are specified in the

Correct Answer
verified

When conducting a governmental financial statement audit,how does the auditor determine the appropriate auditing standards for the engagement?

Correct Answer
verified

Which of the following statements regarding generally accepted government auditing standards (GAGAS) is not true?

Correct Answer
verified

Circumstances that could impair independence and therefore should be evaluated are called

Correct Answer
verified

The opinion paragraph of the independent auditor's standard report states the auditor's opinion that the financial statements are free of errors.

Correct Answer
verified

Performance audits provide findings or conclusions based on an evaluation of sufficient,appropriate evidence against criteria.

Correct Answer
verified

Which of the following would be considered Category (b) GAAP for state and local government auditees?

Correct Answer
verified

Exam 11: Auditing of Governmental and Not-For-Profit Organizations

If the auditor determines that the financial statements contain a departure from GAAP,the effect of which is material,or there has been a material change between periods in accounting principles,or in the method of their application,the auditor should express an unqualified opinion.

Correct AnswerverifiedShow Answer

All of the following reports are included in the reporting package resulting from the single audit except

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Contrast and compare a financial audit to a performance audit,as defined in the GAO's Government Auditing Standards (yellow book).

Correct AnswerAnswered by ExamLex AIA financial audit and a performance audi...View AnswerShow Answer

An auditor performing nonaudit work for a client may be in danger of violating the independence rules in Government Auditing Standards when he or she

Correct AnswerverifiedShow Answer

Required supplementary information (RSI),such as the MD&A and budgetary comparison schedules,are covered under a financial statement audit.

Correct AnswerverifiedShow Answer

Correct AnswerAnswered by ExamLex AIThe key terms in Chapter 11 that relate ...View AnswerShow Answer

Under a single audit

Correct AnswerverifiedShow Answer

A single audit conducted pursuant to the Single Audit Act Amendments of 1996 requires which of the following types of audits?

Correct AnswerverifiedShow Answer

The scope paragraph of an independent auditor's report on a financial audit of a local government

Correct AnswerverifiedShow Answer

Typical objectives of a performance audit include

Correct AnswerverifiedShow Answer

A common reason why a government might receive a "qualified opinion" from the external auditors is

Correct AnswerverifiedShow Answer

Since it is impossible to define every situation that creates threats to independence,the yellow book standards (i.e.,GAGAS)establish a conceptual framework that requires auditors to identify,evaluate,and apply safeguards to appropriately address threats to independence.

Correct AnswerverifiedShow Answer

In the auditor's report the financial statements on which the opinion is being expressed are specified in the

Correct AnswerverifiedShow Answer

When conducting a governmental financial statement audit,how does the auditor determine the appropriate auditing standards for the engagement?

Correct AnswerverifiedShow Answer

Which of the following statements regarding generally accepted government auditing standards (GAGAS) is not true?

Correct AnswerverifiedShow Answer

Circumstances that could impair independence and therefore should be evaluated are called

Correct AnswerverifiedShow Answer

The opinion paragraph of the independent auditor's standard report states the auditor's opinion that the financial statements are free of errors.

Correct AnswerverifiedShow Answer

Performance audits provide findings or conclusions based on an evaluation of sufficient,appropriate evidence against criteria.

Correct AnswerverifiedShow Answer

Which of the following would be considered Category (b) GAAP for state and local government auditees?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
A financial audit and a performance audi...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
The key terms in Chapter 11 that relate ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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