Exam 12: Budgeting and Performance Measurement

An auditor would not render an opinion on a(an)

Typical objectives of a performance audit include

Governments often engage one auditor to audit the primary government and other auditors to audit certain component units.In such cases the auditor of the primary government is permitted under generally accepted auditing standards (GAAS)to rely on the work of the other auditors.

The AICPA's suite of risk assessment audit standards requires that auditors conduct a more rigorous assessment of the risk of material misstatement of the client's financial statements.

In evaluating an entity's system of internal controls a significant deficiency is a deficiency in the design or operation of internal controls of such magnitude that the internal control components do not reduce the risk of detection or prevention of material misstatement to an acceptably low level.

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

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

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

The single audit requirement applies to

"The guidance provided by OMB Circular A-133,the OMB Compliance Supplement,and AICPA publications has resulted in an extraordinarily high level of single audit quality." Do you agree or disagree? Why?

The following are key terms in Chapter 12 that relate to single audits: A.Risk-based approach B.Single audit C.Questioned cost D.Material weakness E.Oversight agency F.Major programs G.Cognizant agency H.Significant deficiency For each of the following definitions,indicate the key term from the list above that best matches by placing the appropriate letter in the blank space next to the definition.

Generally accepted government auditing standards (GAGAS)apply to audits of state and local governments only if they expend $500,000 or more in federal financial assistance.

Answer the following questions relating to the provisions of the Single Audit Act of 1984 and 1996 Amendments. (a)What is a single audit? (b)How do you determine if your government must have a single audit? (c)Where would you find authoritative guidance on conducting a single audit?

What are the benefits to a state or local government of establishing an audit committee?

An audit of a government's financial statements,conducted in accordance with generally accepted government auditing standards (GAGAS),includes

Performance audits,as defined in the GAO's Governmental Auditing Standards

The yellow book (i.e.,GAGAS)independence standard prescribes two overarching principles-Auditors should not perform management functions or make management decisions and auditors should not audit their own work or provide nonaudit services in situations where the nonaudit services are significant to audit subject matter.

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?

What are the essential elements of an "unqualified opinion" expressed in the AICPA standard auditor's report? Your answer should be brief,but complete.

Only state and local governments and their component units must have single audits; colleges and universities and other not-for-profit organizations that expend federal financial awards are not required to have single audits.