This preview has intentionally blurred parts. Sign up to view the full document

View Full Document

Unformatted Document Excerpt

Chapter 13 Auditing, Tax Exempt Organizations, and Evaluating Performance True/False Questions 1. Net Asset classification for a tax-exempt organization are consistent with GASB standards Answer: False 2. The Taxpayer Bill of Rights requires tax-exempt organizations to provide copies, upon request, of the five most recent annual form 990s. Answer: False 3. Tax-exempt organizations are required to disclose the compensation of its officers, directors, trustees and highest paid employees and independent contractors. Answer: True 4. Tax exempt organizations are required to pay tax at the corporate or trust rate on the income generated from any trade or business activities unrelated to the entitys tax-exempt purposes. Answer: True 5. Tax exempt organizations are required to pay tax at the corporate or trust rate on the income generated from any trade or business activities unless the money is used to carry out the entitys tax-exempt purposes. Answer: False 6. The IRS announced that it considers tax-exempt organizations to be one of its four highest enforcement priorities. Answer: True 7. Attestation engagements must comply with the Government Auditing Standards but are exempt from compliance with the AICPAs attestation standards. Answer: False 8. The Government Accountability Office has authority for issuing Governmental Auditing Standards. Answer: True 1 Chapter 13 Auditing, Tax Exempt Organizations, and Evaluating Performance 9. Governments and other nonprofits receiving federal funds follow Governmental Auditing Standards and do not have to comply with AICPA Statements of Auditing Standards. Answer: False 10. If a government failed to report infrastructure assets, the auditor could still express an unqualified opinion on the fund level financial statements. Answer: True 11. While the principal users of corporate audit reports are investors and creditors, the main user of Single Audit reports is the federal government. Answer: True 12. 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. Answer: True 13. The single audit requirements apply only to state and local governments. Private not-for- profits do not have to comply with these requirements, even if they receive federal grants. Answer: False 14. While the Sarbanes-Oxley Act applies only to corporations filing with the Securities and Exchange Commission, several provisions of the Act already existed in governmental auditing standards, and others are being voluntarily adopted by not-for-profit organizations.... View Full Document

End of Preview

Sign up now to access the rest of the document