Exam 13: Auditing, Tax-exempt Organizations, and Evaluating Performance

The three major user groups identified by the GASB are 1) citizen groups, 2) legislative and oversight officials, and 3) investors and creditors.

To compute the debt service to total expenditures, one would need to look in the CAFR for the:

Which of the following is not true of Tax-exempt Entities having 501c 3 status?

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

Entities that are tax-exempt under IRS Section 501c3 are permitted to endorse political candidates or attempt to influence legislation.

Which of the following is not a type of governmental audit?

If an auditee is not considered low-risk, what percent of federal funds expended are auditors required to express an opinion on?

Which of the following would not be an opinion unit of a general purpose government?

Supporting expenses are included in the numerator of the program expense ratio.

What is an "opinion unit" and what are the five opinion units for state and local governments?

What is the purpose of the Unrelated Business Income Tax?

Government Auditing Standards do not apply to audits conducted to satisfy the requirements of the Single Audit Act as well as other governmental audits

A local government has four federal grants. Expenditures during the year ended June 30, 2017, are below: $\text {Type A}$ HHS grant, new this year and never audited \8 80,000 HHS grant, audited last year, no major findings 770,000 $\text {Type B}$ Department of Transportation 65,000 Department of Agriculture Total all funds \2 ,200,000 A. Which grants would the auditor be required to audit, assuming the government is not found to be low risk? B. Which grants would the auditor be required to audit, assuming the government is found to be low risk?

A government publishes information about its fire department. What type of service efforts and accomplishments measure would Fire Loss per Capita represent?

Fund-raising efficiency is a measure of performance that expresses how much an organization spends in raising a dollar of donations.

Assume the mission statement for the City Fire Department is as follows: To minimize the combined cost of fire prevention and fire loss. Give an example of Input, Output, Outcome, and Efficiency measures that might be used in Service Efforts and Accomplishments Reporting.

In a disclaimer of opinion, the auditor states that no opinion is being expressed.

Service Efforts and Accomplishments Reporting is best completed by using

An organization that receives more than two-thirds of its support from a combination of contributions, membership fees, and gross receipts from exempt and no more than one-third of its support from a combination of investment income and net unrelated income after taxes is a public charity.

The most commonly used measure of not-for-profit efficiency is the fund raising expense ratio.