Question 1

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. 
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. B

Question 2

Some of the auditing issues and standards used by auditors of governmental and not-for-profit entities are unique to the public sector.

Accepted Answer

A) True 
 B)False  True

Question 3

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

Accepted Answer

A) True 
 B)False  False

Question 4

Under generally accepted government auditing standards,safeguards are controls designed to reduce or eliminate threats to independence.

Accepted Answer

A) True 
 B)False

Question 5

Describe the importance of materiality for auditors and explain how materiality is determined in audits of state and local governments that follow GASB standards.

Accepted Answer

Materiality,in the auditor's judgment,is

Question 6

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

Question 7

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

Accepted Answer

Governmental audits are conducted under

Question 8

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. 
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 9

Under the existing GAAP hierarchy for state and local government financial reporting,the GASB Implementation guides are:

Accepted Answer

A)  More authoritative than GASB Statements. 
B)  Less authoritative than GASB Technical Bulletins. 
C)  More authoritative than the AICPA state and local government audit guide. 
D)  Equally authoritative to AICPA Practice Bulletins. 
A)  More authoritative than GASB Statements. 
B)  Less authoritative than GASB Technical Bulletins. 
C)  More authoritative than the AICPA state and local government audit guide. 
D)  Equally authoritative to AICPA Practice Bulletins.

Question 10

Under a single audit,low-risk Type A programs are identified as those:

Accepted Answer

A)  Audited in at least one of the two most recent audit periods as a major program. 
B)  With no significant changes in personnel or systems that would have significantly increased risk. 
C)  Considered low-risk in the auditor's professional judgment. 
D)  All of the above. 
A)  Audited in at least one of the two most recent audit periods as a major program. 
B)  With no significant changes in personnel or systems that would have significantly increased risk. 
C)  Considered low-risk in the auditor's professional judgment. 
D)  All of the above.

Question 11

The section headed "Auditor's Responsibility" in the audit report will specify whether the audit is conducted under generally accepted auditing standards or generally accepted government auditing standards.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following statements concerning the Single Audit Act of 1984 (with 1996 Amendments)is correct?

Accepted Answer

A)  Only those entities receiving over $750,000 a year in federal financial assistance are required to have a single audit. 
B)  Those entities expending under $750,000 a year in federal awards may be exempt from single audit requirements. 
C)  The Single Audit Act only applies if an entity has high risk programs. 
D)  The single audit is optional for all entities receiving federal awards. 
A)  Only those entities receiving over $750,000 a year in federal financial assistance are required to have a single audit. 
B)  Those entities expending under $750,000 a year in federal awards may be exempt from single audit requirements. 
C)  The Single Audit Act only applies if an entity has high risk programs. 
D)  The single audit is optional for all entities receiving federal awards.

Question 13

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 provides:

Accepted Answer

A)  Valuation services. 
B)  Advice on establishing or improving internal controls. 
C)  Benchmarking information to the client. 
D)  The client with answers to technical questions. 
A)  Valuation services. 
B)  Advice on establishing or improving internal controls. 
C)  Benchmarking information to the client. 
D)  The client with answers to technical questions.

Question 14

Which of the following is the highest in the hierarchy of generally accepted accounting principles for federal government entities?

Accepted Answer

A)  AICPA Audit and Accounting Guide. 
B)  FASB emerging issues task force reports. 
C)  GASB statements. 
D)  FASAB statements. 
A)  AICPA Audit and Accounting Guide. 
B)  FASB emerging issues task force reports. 
C)  GASB statements. 
D)  FASAB statements.

Question 15

What are clarified auditing standards? Do they apply to audits of governments and not-for-profit organizations?

Accepted Answer

In 2011,the AICPA completed its Clarity

Question 16

Audits of state and local governments may be performed by all of the following except:

Accepted Answer

A)  Independent CPAs. 
B)  State audit agencies. 
C)  Federal grantor agencies. 
D)  The Office of Management and Budget (OM
B) . 
A)  Independent CPAs. 
B)  State audit agencies. 
C)  Federal grantor agencies. 
D)  The Office of Management and Budget (OM
B) .

Question 17

Threats to independence include all of the following except:

Accepted Answer

A)  Bias threat. 
B)  Familiarity threat. 
C)  Undue influence threat. 
D)  Management representation threat. 
A)  Bias threat. 
B)  Familiarity threat. 
C)  Undue influence threat. 
D)  Management representation threat.

Question 18

Which of the following is not a required component of the audit report for a single audit?

Accepted Answer

A)  A report on internal control over financial reporting and compliance with federal statutes, regulations, and the terms and conditions of the federal award. 
B)  An opinion on the completeness of the schedule of expenditures. 
C)  A report on compliance for each major program and on internal control over compliance. 
D)  A schedule of findings and questioned costs. 
A)  A report on internal control over financial reporting and compliance with federal statutes, regulations, and the terms and conditions of the federal award. 
B)  An opinion on the completeness of the schedule of expenditures. 
C)  A report on compliance for each major program and on internal control over compliance. 
D)  A schedule of findings and questioned costs.

Question 19

Audit objectives set forth by the United States Comptroller General in Government Auditing Standards (GAS or GAGAS)differ from the AICPA view (GAAS)as discussed in Chapter 11.What are some of the differences?

Accepted Answer

With the release of AICPA's clarified st

Question 20

If the auditor determines that the financial statements contain a departure from GAAP,the effect of which is material,the auditor should express an unqualified opinion.

Accepted Answer

A) True 
 B)False

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

Some of the auditing issues and standards used by auditors of governmental and not-for-profit entities are unique to the public sector.

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

Under generally accepted government auditing standards,safeguards are controls designed to reduce or eliminate threats to independence.

Describe the importance of materiality for auditors and explain how materiality is determined in audits of state and local governments that follow GASB standards.

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

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

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

Under the existing GAAP hierarchy for state and local government financial reporting,the GASB Implementation guides are:

Under a single audit,low-risk Type A programs are identified as those:

The section headed "Auditor's Responsibility" in the audit report will specify whether the audit is conducted under generally accepted auditing standards or generally accepted government auditing standards.

Which of the following statements concerning the Single Audit Act of 1984 (with 1996 Amendments)is correct?

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 provides:

Which of the following is the highest in the hierarchy of generally accepted accounting principles for federal government entities?

What are clarified auditing standards? Do they apply to audits of governments and not-for-profit organizations?

Audits of state and local governments may be performed by all of the following except:

Threats to independence include all of the following except:

Which of the following is not a required component of the audit report for a single audit?

Audit objectives set forth by the United States Comptroller General in Government Auditing Standards (GAS or GAGAS)differ from the AICPA view (GAAS)as discussed in Chapter 11.What are some of the differences?

If the auditor determines that the financial statements contain a departure from GAAP,the effect of which is material,the auditor should express an unqualified opinion.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-Type Activities of State and Local Governments

Accounting for Fiduciary Activitiesagency and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Governmental Financial Performance

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizationsregulatory, Taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government Glossary

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

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

Some of the auditing issues and standards used by auditors of governmental and not-for-profit entities are unique to the public sector.

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

Under generally accepted government auditing standards,safeguards are controls designed to reduce or eliminate threats to independence.

Describe the importance of materiality for auditors and explain how materiality is determined in audits of state and local governments that follow GASB standards.

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

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

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

Under the existing GAAP hierarchy for state and local government financial reporting,the GASB Implementation guides are:

Under a single audit,low-risk Type A programs are identified as those:

The section headed "Auditor's Responsibility" in the audit report will specify whether the audit is conducted under generally accepted auditing standards or generally accepted government auditing standards.

Which of the following statements concerning the Single Audit Act of 1984 (with 1996 Amendments)is correct?

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 provides:

Which of the following is the highest in the hierarchy of generally accepted accounting principles for federal government entities?

What are clarified auditing standards? Do they apply to audits of governments and not-for-profit organizations?

Audits of state and local governments may be performed by all of the following except:

Threats to independence include all of the following except:

Which of the following is not a required component of the audit report for a single audit?

Audit objectives set forth by the United States Comptroller General in Government Auditing Standards (GAS or GAGAS)differ from the AICPA view (GAAS)as discussed in Chapter 11.What are some of the differences?

If the auditor determines that the financial statements contain a departure from GAAP,the effect of which is material,the auditor should express an unqualified opinion.

Introduction to Accounting and Financial Reporting for Governmental and Not-For-Profit Entities

Principles of Accounting and Financial Reporting for State and Local Governments

Governmental Operating Statement Accounts Budgetary Accounting

Accounting for Governmental Operating Activitiesillustrative Transactions and Financial Statements

Accounting for General Capital Assets and Capital Projects

Accounting for General Long-Term Liabilities and Debt Service

Accounting for the Business-Type Activities of State and Local Governments

Accounting for Fiduciary Activitiesagency and Trust Funds

Financial Reporting of State and Local Governments

Analysis of Governmental Financial Performance

Budgeting and Performance Measurement

Accounting for Not-For-Profit Organizations

Not-For-Profit Organizationsregulatory, Taxation, and Performance Issues

Accounting for Colleges and Universities

Accounting for Health Care Organizations

Accounting and Reporting for the Federal Government Glossary

Filters