Chapter 15 (ACCT-410)

Chapter 15 (ACCT-410) - 15 Chapter Auditing Governments and...

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15 Chapter Auditing Governments and Not-For-Profit Organizations TRUE/FALSE (CHAPTER 15) 1. A cognizant agency can be either an employee of a federal agency or of an independent accounting firm. 2. The Single Audit Act of 1984 was passed to eliminate the costly practice of requiring separate audits for each federal program in which an organization participated. 3. Performance audits are sometimes referred to as operational audits. 4. Performance audits must be conducted by independent auditors. 5. To attest means to confirm that something is true, correct, or genuine. 6. An auditor of any governmental or not-for-profit that receives federal monies must include a report on the entity s internal control structure within their audit report or provide a crossreference to that report. 7. The AICPA originally established auditing standards for federal single audits. 8. Newly installed computer programs are one indicator that a government s participation in a federal program may be at high risk of noncompliance. 9. GAO independence guidelines permit CPA firms to determine the estimated useful lives of their clients assets. 10. Under GAO (GAGAS) standards, independent auditors must report all instances of fraud or illegal acts that they discover during the course of an audit. 11. Regarding the single audit process, required supplemental information is considered to be within the scope of the audit. ch15Ch 15 Test Bank-4e.doc Page 1 MULTIPLE CHOICE (CHAPTER 15) 1. The GAO publication Government Auditing Standards (commonly known as the Yellow Book) is applicable in which of the following audit situations? a) To independent CPAs conducting a performance audit of a governmental entity that receives no federal financial assistance. b) To independent CPAs auditing a nongovernmental entity that receives federal financial assistance. c) To independent CPAs auditing a governmental entity that receives no federal financial assistance. d) To state auditors auditing a local government that does not receive federal financial assistance. Which of the following is an example of a financial audit? a) An audit of financial statements to determine if they are presented fairly in accordance with generally accepted accounting principles. b) An audit to determine whether the objectives of a new program are suitable and relevant and whether the entity has complied with laws and regulations that may have a material effect on the financial statements. c) An audit of the financial report on the Noxious Weed Special Revenue Fund to determine whether the entity has complied with specific financial-related requirements. d) An audit to determine whether an entity is acquiring its resources economically and efficiently. A performance audit includes which of the following? a) Economy and efficiency audit. b) Program audits. c)b)Both (a) and (b). c)b)None of the above. A program audit would include which of the following? a) Determining if sound
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Chapter 15 (ACCT-410) - 15 Chapter Auditing Governments and...

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