ACC 410 Week 10 Quiz – Strayer
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Quiz 8 Chapter 14
Auditing Governments and
Not-for-Profit Organizations
TRUE/FALSE (CHAPTER 14)
1. In 1972, the GAO issued
Government Auditing Standards known as the Blue Book.
2.
Performance
audits are intended to determine whether an entity’s financial statements are
presented fairly in accordance to GAAP.
3. Agencies that provide funds to
governments may stipulate that the audit be conducted in accordance with
generally accepted government auditing standards (GAGAS).
4. GAO standards do not mandate a
peer review process for audit organizations.
5. The Single Audit Act applies to
organizations receiving more than $500,000 in federal assistance under more
than one program be subject to a single audit.
6. A single audit has two main
components: an audit of the financial statements and an audit of federal
financial awards.
7. In a single audit, auditors are
expected to provide an opinion on the financial statements and on the schedule
of expenditures of federal awards.
8. Performance audits are most
commonly conducted by external auditors.
9. The Sarbanes-Oxley Act has had no
impact on governmental auditing.
10. Performance audits may be conducted by staff without
training in accounting.
MULTIPLE
CHOICE (CHAPTER 14)
1.
In
reporting the results of a performance audit, it is appropriate for the
auditors to
a. conjecture as to the reasons for
the program’s failure to achieve desired results
b. include the auditors’ response to
management’s objections to the auditors’ findings
c. provide recommendations as to how
the program can be improved
d. all of the above.
2.
Government
Auditing Standards must be adhered to in all financial audits except of
a. state and local governments
b. federal agencies
c. federally chartered banks
d. public corporations
3.
In
discerning the objectives of a program to be audited, the auditors should give
the least credibility to
a. the legislation creating the
program
b. the organization’s program budget
c. the organization’s mission
statement and strategic plan
d. comments by the lower-level
employees who actually depend on the program for their livelihoods.
4.
‘‘Generally
accepted government auditing standards’’ (GAGAS) refers to standards
incorporated in
a. the Yellow Book
b. the Yellow Book and OMB Circular
A-133
c. the Yellow Book and the AICPA’s
Professional Standards
d. the Yellow Book OMB Circular
A-133, and the AICPA’s Professional Standards
5.
Which
of the following statements is incorrect about GAO standards pertaining to
performance audits?
a. The GAO mandates that programs be
audited annually by accounting trained professionals
b. Performance audits are normally
carried out by internal audit departments
c. Performance audits focus on
specific programs
d. The GAO does not specify when and
how often a program, must be audited
6.
Government
Auditing Standards characterizes government engagements into which of the
following three categories?
a. financial audits, compliance
audits, and performance audits
b. financial audits, operational
audits, and performance audits
c. financial audits, attest
engagements, and performance audits
d. financial audits, efficiency and
effectiveness audits, and compliance audits
7.
The
purpose of this is to avoid duplication of efforts in conducting governmental
audits
a. AICPA’s Professional Standards
b. GAO’s Government Auditing
Standards
c. Single Audit Act
d.
OMB
Circular A-133
8.
The
Yellow Book’s general standards are issued by the
a. GAO
b. FASB
c. AICPA
d. IRS
9.
Which
of the following is not reported upon in the Schedule of Findings and
Questioned Costs?
a. reportable conditions related to
internal control
b. material noncompliance with
provisions of laws, regulations, contracts, or grant agreements
c. material examples of inefficiency
and ineffectiveness in carrying out federally funded programs
d. federally reimbursed expenditures
that are not adequately documented
10.
Which
of the following is not a General Auditing Standard for financial audits?
a. professional judgment
b. financial stability
c. independence
d. competence
11.
Which
of the following is a Yellow Book standard in respect to independence?
a. auditors may only audit one
government agency during a fiscal year
b. auditors should not audit their
own work
c. auditors may not advise in
respect to computer installation
d. auditors may not audit public corporations
12.
Federal
funds must be used only for activities that are within the scope of the grant
would be a(n)
a. optional activity
b. Yelllow Book mandate
c. allowable activity
d. prohibited activity
13.
This
law requires that the wages of laborers and mechanics employed by the
contractors of federally funded projects be paid at prevailing local wage
rates.
a. Davis-Bacon Act
b. Sarbanes-Oxley Act
c. Federal Wage and Hour Law
d. IRS Act
14. The process of specifically directing federal funds to
a particular program is called:
a. allocation
b. earmarking
c. identification
d. subversion
15.
Per
the GAO standards, an auditor’s working papers must
a. be made public unless they
contain information that would be harmful to national security
b. contain sufficient information to
convince an auditor having no previous connection with the audit that the
evidence supports the auditor’s conclusions and judgments
c. be retained by the auditor for a
period of no less than 10 years
d. include documentation that the
individual auditors on the engagement have satisfied the standards’ continuing
professional education requirements
16. Auditors who perform government audits must complete
80 hours of continuing professional education every two years, of which ____
hours must be related directly to government auditing.
a.
24
b.
30
c.
16
d.
8
PROBLEMS (CHAPTER 14)
1. In a program review, auditors need to identify
compliance requirements that are specific to the program itself and that are
applicable to all federal award recipients. Identify and describe three general
compliance requirements.
2. What reports result from single audits?
ESSAYS
(CHAPTER 14)
1.
How
does Sarbanes-Oxley and IRS regulations affect governments and not-for-profits?
2. What are some questions that need
to be addressed in assessing an ethical conflict?
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