Question 1

The GASB has issued standards for Service Efforts and Accomplishments Reporting.

Accepted Answer

A) True 
 B)False

Question 2

Service Efforts and Accomplishments Reporting is mandatory for not-for-profit organizations.

Accepted Answer

A) True 
 B)False

Question 3

To apply for tax-exempt status,a non-profit organization must file:

Accepted Answer

A)   IRS Form 501(c)  (3) 
B)   IRS Form 990
C)   IRS Form 1023
D)   None of the above

Question 4

Why is Service Efforts and Accomplishments reporting especially important for governmental and not-for-profit entities?

Accepted Answer

Service Efforts and Accomplishments repo...

Question 5

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

A major program is one that is selected ...

Question 6

List four sources of income that is not subject to the unrelated business income tax:

Accepted Answer

Any four of the following: (a)The busine...

Question 7

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

Accepted Answer

A)   All governmental entities with expenditures of federal funds in excess of $500,000 must have a single audit, if more than one program exists
B)   An audit must be designed to cover 50 percent of federal funds expended, in all cases
C)   Both of the above
D)   Neither of the above

Question 8

The IRS announced that it considers tax-exempt organizations to be one of its four highest enforcement priorities.

Accepted Answer

A) True 
 B)False

Question 9

A tax-exempt organization must pay income taxes on income generated from trade or business activities unrelated to the entity's tax-exempt purposes.

Accepted Answer

A) True 
 B)False

Question 10

The document often relied on for financial analysis by investors and creditors for bonds in the secondary market is:

Accepted Answer

A)   the official statement issued by the government issuing the bonds
B)   the comprehensive annual financial report
C)   an analysis prepared by the government's auditor
D)   none of the above

Question 11

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

Accepted Answer

A)   Governmental activities.
B)   Business-type activities.
C)   Each Major Fund.
D)   All of the above are opinion units.

Question 12

What is the purpose of the Unrelated Business Income Tax?

Accepted Answer

Not-for-profits performing business acti...

Question 13

Governmental Audit Reports are due nine months after the end of the fiscal year.

Accepted Answer

A) True 
 B)False

Question 14

All of the following are differences between private sector auditing and governmental auditing except:

Accepted Answer

A)   The public availability of audit reports.
B)   Testing of compliance with laws and regulations.
C)   Governmental audits require auditor knowledge of government accounting and auditing.
D)   All of the above are differences between private sector auditing and governmental auditing.

Question 15

The Museum of Creative Arts had the following expenses: $5,000 of membership development expense,$3,000 of Fundraising expense,$2,000 of Instructional Classes expense,and $1,500 of general and administrative expense.What is the program expense ratio (rounded) ?

Accepted Answer

A)   43%
B)   39%
C)   17%
D)   70%

Question 16

Government Auditing Standards identify which of the following categories of professional engagements?

Accepted Answer

A)   Financial audits, and performance audits
B)   Financial audits, agreed-upon procedures and performance audits
C)   Financial audits, attestation engagements, performance audits, and nonaudit services
D)   Financial audits

Question 17

Tax exempt entities are not allowed to make contributions to political campaigns or they may loose their tax exempt status.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is an area of concern by the IRS with respect to tax-exempt organizations?

Accepted Answer

A)   Cost allocations.
B)   Excess executive compensation.
C)   Organizations operating out of their tax-exempt purpose.
D)   All the above.

Question 19

The term "opinion unit" refers to which of the following?

Accepted Answer

A)   A state or local government together with its component units
B)   A level of reporting of a government that requires a separate materiality level
C)   A division of a CPA firm
D)   One of the four statements required in the second paragraph of an unqualified audit opinion

Question 20

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

Accepted Answer

A)   Fundraising efficiency
B)   Program expense ratio
C)   Working capital ratio
D)   None of the above

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

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.

Correct AnswerverifiedA major program is one that is selected ...View AnswerShow Answer

A tax-exempt organization must pay income taxes on income generated from trade or business activities unrelated to the entity's tax-exempt purposes.

Correct AnswerverifiedShow Answer

The IRS announced that it considers tax-exempt organizations to be one of its four highest enforcement priorities.

Correct AnswerverifiedShow Answer

Why is Service Efforts and Accomplishments reporting especially important for governmental and not-for-profit entities?

Correct AnswerverifiedService Efforts and Accomplishments repo...View AnswerShow Answer

Governmental Audit Reports are due nine months after the end of the fiscal year.

Correct AnswerverifiedShow Answer

Service Efforts and Accomplishments Reporting is mandatory for not-for-profit organizations.

Correct AnswerverifiedShow Answer

The GASB has issued standards for Service Efforts and Accomplishments Reporting.

Correct AnswerverifiedShow Answer

To apply for tax-exempt status,a non-profit organization must file:

Correct AnswerverifiedShow Answer

Tax exempt entities are not allowed to make contributions to political campaigns or they may loose their tax exempt status.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

What is the purpose of the Unrelated Business Income Tax?

Correct AnswerverifiedNot-for-profits performing business acti...View AnswerShow Answer

Government Auditing Standards identify which of the following categories of professional engagements?

Correct AnswerverifiedShow Answer

List four sources of income that is not subject to the unrelated business income tax:

Correct AnswerverifiedAny four of the following: (a)The busine...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

All of the following are differences between private sector auditing and governmental auditing except:

Correct AnswerverifiedShow Answer

The document often relied on for financial analysis by investors and creditors for bonds in the secondary market is:

Correct AnswerverifiedShow Answer

The Museum of Creative Arts had the following expenses: $5,000 of membership development expense,$3,000 of Fundraising expense,$2,000 of Instructional Classes expense,and $1,500 of general and administrative expense.What is the program expense ratio (rounded) ?

Correct AnswerverifiedShow Answer

The term "opinion unit" refers to which of the following?

Correct AnswerverifiedShow Answer

Which of the following is an area of concern by the IRS with respect to tax-exempt organizations?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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A major program is one that is selected ...
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Service Efforts and Accomplishments repo...
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Not-for-profits performing business acti...
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Any four of the following: (a)The busine...
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