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

Governmental Audit Reports may include a report describing instances of fraud or illegal acts.

A measure of performance that expresses how much an organization expends in raising a dollar of donations is:

Entities that are tax-exempt under IRS Section 501c3 with gross receipts less than $500,000 may file Form 990-N electronic postcard.

The highest bond rating assigned by Moody's is:

The purpose of audits conducted under the Single Audit Act is to provide assurance that federal and state funds are expended in accordance with grant agreements, and with financial management and other standards promulgated by the federal government.

In a governmental audit the auditor is only required to report to the board or audit committee.

The Single Audit Act intends that auditors conducting regular financial audits of state and local governments and not-for-profits organizations provide assurance to the federal government that:

Service efforts are measures of costs and other resources dedicated to a program or service.

The Taxpayer Bill of Rights requires to provide copies, upon request, of the three most recent annual form 990s.

Which of the following is not correct with respect to Service Efforts and Accomplishments SEA reporting? A) The fundamental problem is that government and not-for-profit effectiveness cannot be expressed solely in financial terms. B) Ratio analysis is sufficient to illustrate program efficiency and effectiveness. C) Effectiveness in nonbusiness organizations must be measured in terms of the quality of the service provided or the extent to which an organization fulfills its mission. D) To demonstrate effectiveness, many governments and not-for-profits report nonfinancial information in addition to their financial statements.

Governmental Auditing Standards identifies four categories of professional engagements: financial audits, performance audits, attestation engagements, and non-audit services.

Debt service coverage can only be directly measured from proprietary fund statements since cash flow statements are not prepared for governmental funds or at the government-wide level.

Currently, a single audit is required for organizations receiving what amount of federal funds?

Section 501c3, exempt organizations are prohibited from supporting political candidates or campaigning to influence legislation.

List four sources of income that are not subject to the unrelated business income tax.

Which of the following is not true regarding the Single Audit Act and its amendments?

Under the terms of the Single Audit Act and its amendments, what percentage of major program expenditures must be selected for audit?

Which type of audit opinion is appropriate if an auditor is not deemed to be independent?

Governmental units and many not-for-profit organizations are subject to Government Auditing Standards in addition to the Statements on Auditing Standards, issued by the American Institute of Certified Public Accountants AICPA.

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