The Scope of Audits of Recipients of Federal Financial Assistance

Multiple Choice

The scope of audits of recipients of federal financial assistance in accordance with federal audit regulations varies. Which of the following elements do these audits have in common?

A) The auditor is required to disclose all situations and transactions that could be indicative of fraud, abuse, and illegal acts to the federal inspector general.
B) The materiality levels are higher and are determined by the government entities that provide the federal financial assistance to the recipients.
C) The auditor is required to document an understanding of internal control established to ensure compliance with the applicable laws and regulations.
D) The accounts should be 100% verified by substantive tests because certain statistical sampling applications are not permitted.