Question 1

Which of the following is true regarding the Single Audit Act and its amendments?

Accepted Answer

Entities that expend $750,000 or more in federal awards in a fiscal year have either a single audit when several grantors are involved) or a program-specific audit usually when only one grantor is involved). The auditor is required to express an opinion on compliance for major programs, which generally must add up to 50% of the federal funds expended by the auditee. This percentage is reduced to 25% if the auditee is determined by the auditor to be a low-risk auditee.

Question 2

Which of the following applies to governmental auditing and not private sector auditing?

Accepted Answer

The public availability of audit reports, testing of compliance with laws and regulations and auditor knowledge of government accounting and auditing are all required for governmental auditing and not private sector auditing.

Question 3

Which organization promulgates the Government Auditing Standards?

Accepted Answer

Government Auditing Standards which are issued by the U.S. Government Accountability Office GAO.

Question 4

Which of the following would be considered a performance audit under the Government Auditing Standards?

Accepted Answer

Performance audits are undertaken to assess program effectiveness and results.

Question 5

Which of the following is true regarding the Single Audit Act and its amendments?

Accepted Answer

The auditor is required to express an opinion on compliance for major programs, which generally must add up to 50% of the federal funds expended by the auditee. This percentage is reduced to 25% if the auditee is determined by the auditor to be a low-risk auditee. Major programs are determined on a risk-based approach.

Question 6

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:

Accepted Answer

The main objective of the single audit process is to create a mechanism whereby those auditors conducting the regular financial audits of state and local governments and not-for-profit organizations can provide assurance to the federal government that federal funds are expended in accordance with grant agreements and with financial management and other standards promulgated by the federal government.

Question 7

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

Accepted Answer

The types of governmental audits are: financial audit, attestation engagements and performance audits. Consulting engagements are not audits.

Question 8

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

Accepted Answer

The auditor is required to express an opinion on compliance for major programs, which generally must add up to 50% of the federal funds expended by the auditee. This percentage is reduced to 25% if the auditee is determined by the auditor to be a low-risk auditee.

Question 9

Which of the following is true regarding the Single Audit Act and its amendments?

Accepted Answer

Major programs are determined on a risk-based approach not by size. The auditor is required to express an opinion on compliance for major programs, which generally must add up to 50% of the federal funds expended by the auditee. This percentage is reduced to 25% if the auditee is determined by the auditor to be a low-risk auditee.

Question 10

Which of the following would be a financial audit or a part of a financial audit) under the Government Auditing Standards?

Accepted Answer

An audit expressing an opinion on the basic financial statements of a state or local government audit would be a financial audit under the Government Auditing Standards. An examination to determine whether purchasing procedures are appropriately designed to assure program supplies meet standards would be a performance audit.

Question 11

Government Auditing Standards identify which of the following categories of professional engagements:

Accepted Answer

The four categories of professional engagements identified by the Government Auditing Standards are Financial audits, Attestation Engagements, Performance Audits and Nonaudit Services.

Question 12

The term "opinion unit" refers to which of the following:

Accepted Answer

In any audit engagement, the auditor must determine a level of materiality. This determination is then used to plan, perform, and evaluate the results of audit procedures. Because of the various levels of reporting by governments government-wide, fund-type and individual fund), separate materiality evaluations are needed for the different levels of reporting.

Question 13

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

Accepted Answer

Financial Audits provide an opinion about whether an entity's financial statements are presented fairly in all material respects in conformity with applicable accounting standards.

Question 14

Which of the following is a governmental audit that is concerned with examining, reviewing, or performing agreed upon procedures on a subject matter of an assertion and reporting on the results?

Accepted Answer

Attestation engagements involve a report of an examination , review, or agreed upon procedures on a subject matter or an assertion about a subject matter that is the responsibility of another party.

Question 15

Which of the following is true regarding the Single Audit Act and its amendments?

Accepted Answer

Major programs are determined on a risk-based approach not by size. The auditor is required to express an opinion on compliance for major programs, which generally must add up to 50% of the federal funds expended by the auditee. This percentage is reduced to 25% if the auditee is determined by the auditor to be a low-risk auditee. The single audit allows auditors conducing the regular financial audits of state and local governments and not-for-profits to provide assurance to the federal government that federal funds are expended in accordance with grant agreements and with financial management and other standards promulgated by the federal government. This is more efficient than having grant-by-grant audits supervised by each agency that provides funds.

Question 16

Which of the following would be an example of an attestation engagement?

Accepted Answer

Attestation Engagements involve a report of an examination, review, or agreed-upon procedures on a subject matter or an assertion about a subject matter that is the responsibility of another party. Attestation engagement encompass a wide range of activities. These include reporting on an entity's system of internal control, compliance with laws and regulations, prospective financial information and costs under contracts.

Question 17

The use of opinion units allows the auditor to

Accepted Answer

In any audit engagement, the auditor must determine a level of materiality. This determination is then used to plan, perform, and evaluate the results of audit procedures. Because of the various levels of reporting by governments government-wide, fund-type and individual fund), separate materiality evaluations are needed for the different levels of reporting. Opinion units allow the auditor to give different opinions on components of the reporting entity.

Question 18

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

Accepted Answer

Auditors are to report deficiencies in the design or operation of internal controls.

Question 19

Government Auditing Standards, published in a document called the Yellow Book, incorporate the AICPA standards and provide extensions that are necessary due to the unique nature of public entities. Which of the following is not one of the extensions?

Accepted Answer

These extensions require auditor knowledge of government accounting and auditing, public availability of audit reports, written evaluations of internal controls, and distribution of the reports and availability of working papers to federal and state funding authorities. Higher materiality thresholds than in the private sector is not one of the extensions.

Question 20

Which of the following is not part of a financial audit?

Accepted Answer

Forming judgments about internal controls, testing compliance with laws and regulations providing an opinion on compliance with GAAP are all part of a financial audit. Assessing the degree to which program objectives have been met would be categorized as service and efforts and accomplishments reporting. Service Efforts and Accomplishments Reporting includes measures of service inputs, outputs and outcomes and are not audited.

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

Which of the following is true regarding the Single Audit Act and its amendments?

Which of the following applies to governmental auditing and not private sector auditing?

Which organization promulgates the Government Auditing Standards?

Which of the following would be considered a performance audit under the Government Auditing Standards?

Which of the following is true regarding the Single Audit Act and its amendments?

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:

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

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

Which of the following is true regarding the Single Audit Act and its amendments?

Which of the following would be a financial audit or a part of a financial audit) under the Government Auditing Standards?

Government Auditing Standards identify which of the following categories of professional engagements:

The term "opinion unit" refers to which of the following:

Which of the following is a governmental audit type that has a primary concern with providing reasonable assurance about whether financial statements are presented fairly?

Which of the following is a governmental audit that is concerned with examining, reviewing, or performing agreed upon procedures on a subject matter of an assertion and reporting on the results?

Which of the following is true regarding the Single Audit Act and its amendments?

Which of the following would be an example of an attestation engagement?

The use of opinion units allows the auditor to

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

Government Auditing Standards, published in a document called the Yellow Book, incorporate the AICPA standards and provide extensions that are necessary due to the unique nature of public entities. Which of the following is not one of the extensions?

Which of the following is not part of a financial audit?