Chapters 9-12 & 17
The GAGAS conceptual framework for independence should be used to assess threats to independence: A) Annually. B) At the start of a new audit engagement. C) Any time a threat to independence comes to the attention of the audit organization. D) Both B and C are correct.
D
The authoritative literature that is second only to GASB statements and interpretations in the hierarchy of generally accepted accounting principles (GAAP) for state and local governments is: A) AICPA Practice Bulletins. B) GASB Implementation Guides with Questions and Answers. C) Statements of GASB's Emerging Issues Task Force. D) AICPA Industry Audit and Accounting Guides.
D
A citizen watch group is concerned that the bond investors and lenders might try to take over and run the city. Which performance measure best addresses whether the government can pay its bond investors and lenders on time so the group's concerns are groundless? A) Debt service coverage. B) Liquidity. C) Financing margin. D) Self-sufficiency.
A
A cognizant agency for audit responsibilities in a single audit is: A) The federal awarding agency that provides the predominant amount of direct funding to a nonfederal recipient. B) Always required no matter how much an entity expends in federal awards. C) Normally designated by the Office of Management and Budget. D) Designated when a nonfederal entity does not receive a large enough amount of federal awards to be assigned an oversight agency.
A
According to Statement of Federal Financial Accounting Concepts (SFFAS) No. 34, which of the following would be considered GAAP if made applicable to federal entities by the FASAB? A) AICPA Industry Audit and Accounting Guides. B) FASB standards. C) GASB standards. D) All of the above.
A
All of the following are funds used in federal accounting except: A) Permanent funds. B) Special funds. C) General Fund. D) Deposit funds.
A
As defined by OMB Circular A-87, indirect costs: A) Are incurred for a common or joint purpose benefiting more than one cost objective. B) Can be identified specifically with a particular cost objective. C) Are assigned to the cost objectives specifically benefited. D) Both A and C are correct.
A
Auditing financial statements prepared under the GASB reporting model requires separate materiality determinations for each: A) Opinion unit. B) Fund. C) Activity. D) Component unit.
A
Condition of the capital plant, as measured by maintenance effort and capital outlay, is an example in the Financial Trend Monitoring System of: A) Financial factors. B) Environmental factors. C) Organizational factors. D) Management practices and legislative policies.
A
Financial statements of governmental and not-for-profit entities are: A) The representations of the officials responsible for the financial management of the entity. B) The representation of the financial position of the entity as prepared by the auditor. C) Always accompanied by the report of an independent auditor. D) The product of the audit.
A
In a state or local government, the budget for which of the following most likely occurs first? A) Governmental appropriations. B) Capital expenditures. C) Governmental revenues. D) Cash receipts.
A
In preparing financial information to be reported in the Governmental Activities column of the government-wide statement of activities, depreciation expense is usually reported as: A) Part of the various program expenses. B) A separate line-item below the program expenses. C) A separate line-item below general revenues in the lower part of the statement. D) All of the above are permissible under GASB standards.
A
The GASB has tentatively decided to use of the term economic condition as a broad concept that includes all of the following components except: A) Financial condition. B) Fiscal capacity. C) Financial position. D) Service capacity.
A
The budgetary comparison schedule prepared by state and local governments: A) Can be presented as required supplementary information (RSI) or as a statement in the basic financial statements. B) Must be a schedule included as part of RSI. C) Is a statement included in the basic financial statements. D) Is not required.
A
The Financial Trend Monitoring System lists political culture, such as attitudes towards taxes, and the political process as examples of: A) Financial factors. B) Environmental factors. C) Organizational factors. D) Business factors.
B
Trust funds and deposit funds are examples of: A) Funds held by the government in the capacity of custodian or trustee. B) Funds derived from general taxing and revenue powers and from business operations. C) Funds used to account for proceeds arising from user charges for goods and services provided by federal agencies. D) None of the above.
A
Under the GASB reporting model, which of the following is not a basic financial statement? A) Schedule of revenues, expenditures, and changes in fund balance—budget and actual. B) Statement of activities. C) Statement of revenues, expenses, and changes in fund net position—proprietary funds. D) Statement of changes in fiduciary net position.
A
Which of the following best represents the format for the government-wide statement of activities? A) Function/program expenses - program revenues = net (expenses) revenues -/+ general revenues = change in net position. B) Operating expenses - operating revenues +/- nonoperating revenues (expenses) = change in net position. C) Operating revenues - operating expenses +/- nonoperating revenues (expenses) = change in net position. D) Program revenues - function expenses + general revenues = net change in position.
A
Which of the following is correct regarding interim financial reports? A) Interim reporting is highly recommended for sound financial administration. B) GASB standards require quarterly reports. C) The Securities and Exchange Commission requires state or local governments with outstanding public debt to provide quarterly financial reports to bondholders. D) Both B and C are correct.
A
Which of the following items describes a measure of the change from the prior period in total net position of the government as a whole for governmental and business-type activities (BTA)? A) Total ending net position (governmental activities and BTA) less total beginning net position (governmental activities and BTA). B) Total revenue divided by total expenses. C) Unrestricted net position divided by total revenue. D) BTA service charge revenues divided by BTA total expenses.
A
Which of the following provides guidance to government managers and auditors in determining appropriate and allowable costs chargeable to federal grants and contracts for state and local governments? A) OMB Circular A-87 Cost Principles for State, Local and Indian Tribal Governments. B) OMB Circular A-102 Grants and Cooperative Agreements with State and Local Governments. C) OMB Circular A-122 Cost Principles for Non-Profit Organizations. D) OMB Circular A-133 Audits of States, Local Governments, and Non-Profit Organizations.
A
Which of the following statements concerning the GAGAS general standards for a financial audit is correct? A) The audit firm has the responsibility for ensuring that its audit staff is competent B) Twenty of the 80 continuing professional education (CPE) credits that are taken every two years should relate to government auditing or the government/not-for-profit environment. C) An external peer review is to be conducted every three years, with an internal review conducted annually. D) All of the above statements are correct.
A
Which of the following statements is incorrect, as it relates to the statement of social insurance? A) All federal agencies are required to prepare a statement of social insurance. B) The preparation of a statement of social insurance is complex, relying on several actuarial calculations. C) A statement of social insurance provides present value calculations of estimated tax receipts and estimated program costs. D) A statement of social insurance provides prior years information about actual tax receipts and program costs.
A
Which of the following would be added to total fund balances in the governmental funds balance sheet to reconcile the amount to reported total net position, governmental activities, on the government-wide statement of net position? A) Capital assets used in governmental activities. B) Long-term liabilities reported in governmental activities. C) Accumulated depreciation on capital assets used in governmental activities. D) Both A and C would be added.
A
GASB Concepts Statement No. 2, as amended by Concepts Statement No. 5: A) Makes SEA reporting a requirement for all state and local governments. B) Clarifies the role of SEA reporting as complementary to CAFR reporting yet integral to broader general purpose external financial reporting. C) Provides a set of templates from which governments can choose from when implementing SEA reporting. D) All of the above.
B
A budgeting approach that requires the very existence of each activity and the amount of resources requested to be allocated to that activity to be justified each year is called: A) Incremental budgeting. B) Zero-based budgeting. C) Performance budgeting. D) Planning-program-budgeting.
B
A city has an ordinance passed by its city council indicating that resources received from a user charge can be used only for a specified purpose. Which of the following fund balance classifications would be used to report the resources related to the user charge? A) Restricted fund balance. B) Committed fund balance. C) Assigned fund balance. D) Unassigned fund balance.
B
A federal agency's fiduciary responsibility to report on how much it has collected and accrued on behalf of the General Fund of the Treasury, a trust fund, or other recipient entities is reported on a: A) Balance sheet. B) Statement of custodial activity. C) Statement of budgetary resources. D) Statement of net costs.
B
An argument for presenting a comprehensive annual financial report (CAFR) in addition to the basic financial statements is: A) Generally accepted accounting principles require a CAFR to be prepared by governments. B) The complex nature of financial condition and lack of a "bottom-line" performance measure for governments makes all three sections of the CAFR useful for decision makers. C) Narrative information is always better than mere financial statements. D) The management's discussion and analysis included in a CAFR provides useful information not available in the basic financial statements or required supplementary information.
B
An often used approach to budgeting that simply derives the next year's budget from the current year's budget is called: A) Planning-program-budgeting. B) Incremental budgeting. C) Zero-based budgeting. D) Performance budgeting.
B
Budgeting for long-lived assets, or capital expenditures, is best done at the: A) Business-type activities level. B) Government-wide level. C) Governmental fund level. D) Governmental-type activities level.
B
The Sarbanes-Oxley Act of 2002 A) Has no effect on governmental or not-for-profit organizations. B) Includes best practices relating to audit committees and internal controls that can be adapted by governments and not-for-profit organizations. C) Applies equally to governments, not-for-profit organizations and businesses. D) None of the above statements are true.
B
The primary criterion considered in determining whether a potential component unit should be reported as part of the governmental reporting entity is: A) Financial interdependence. B) Financial accountability. C) Political responsibility. D) Taxing authority
B
The primary objective of a financial audit of a governmental or not-for-profit entity by an independent auditor is to provide assurance that: A) The entity is effectively accomplishing its mission and efficiently using its resources. B) The financial statements present fairly the financial position, results of operations, and cash flows of an organization in conformity with generally accepted accounting principles. C) The financial statements are free of errors and misstatements and all fraud was detected. D) All of the above.
B
The term used by authorized agency employees to reserve allotted budget authority in the estimated amount of an order prior to the actual ordering of goods and services is: A) Allotment. B) Commitment. C) Obligation. D) Expended appropriation.
B
The term used by the GASB to describe the short-term financial concept readily determined from the financial statements of governmental funds is: A) Economic condition. B) Financial position. C) Fiscal capacity. D) Financial condition.
B
The three sections of a comprehensive annual financial report (CAFR) prepared in conformity with GASB standards are the: A) MD&A, basic financial statements, and notes to the financial statements. B) Introductory, financial, and statistical sections. C) MD&A, financial, and statistical sections. D) Audit, MD&A, and the financial section.
B
Under the GASB reporting model, net position in the government-wide statement of net position should be divided into the categories of: A) Reserved, unrestricted—designated, unrestricted—undesignated. B) Net investment in capital assets, restricted, and unrestricted. C) Unrestricted, temporarily restricted, and permanently restricted. D) None of the above is correct.
B
Which of the following is a true statement about information used by decision makers in evaluating governments' financial performance? A) Internal managers do not have access to as much information as do credit analysts. B) Internal managers have an informational advantage over credit analysts with respect to their own governments. C) Internal managers have an informational advantage over bond rating agency analysts with respect to benchmark information. D) None of the above statements are true.
B
Which of the following is a true statement about the comparison of generally accepted auditing standards (GAAS) to generally accepted government auditing standards (GAGAS)? A) GAGAS are used when auditing governmental organizations while GAAS are used in auditing not-for-profit organizations. B) GAGAS are broader in scope than GAAS. C) There are more GAAS in the areas of general standards, field work standards, and reporting standards than there are GAGAS. D) GAGAS refer to financial audits only.
B
Which of the following statements concerning the GAGAS reporting standards for a financial audit is incorrect? A) Sensitive information may be omitted from the audit report. B) A report on internal control over financial reporting and compliance must be provided as part of the audit report prepared for financial statements. C) The fact that the audit was conducted in accordance with GAGAS is to be indicated in the audit report. D) If internal control deficiencies are reported, any plans for corrective action should be included.
B
Which of the following statements is true regarding the basic financial statements prepared for governmental funds in the GASBS reporting model? A) The governmental funds financial statements display totals for each fund type in separate columns. B) The governmental funds financial statements display financial information for each major governmental fund in separate columns and display the totals for all nonmajor governmental funds in a single column. C) The governmental fund financial statements are prepared using the accrual basis of accounting and the economic resources measurement focus. D) The governmental funds balance sheet reports general capital assets, net of depreciation, and general long-term liabilities.
B
Which of the following terms best describes assets that are held by the entity but are not available for the entity to spend? A) Entity assets. B) Nonentity assets. C) Intragovernmental assets. D) Governmental assets.
B
Which ratio measures the degree to which the government's total assets have been funded with debt, indicating the extent of true ownership of government assets? A) Total revenues divided by total expenses. B) Total debt divided by total assets. C) Current assets divided by current liabilities. D) Total ending net position less total beginning net position.
B
Which ratio measures the government's ability to meet its current financial obligations from available cash and equivalents? A) Total revenue divided by total expenses. B) Current assets divided by current liabilities. C) Business-type activities revenue divided by business-type activity expenses. D) Each revenue source divided by total revenue.
B
Which type of solvency indicates a government's ability to generate enough revenue over a normal period to meet its expenditures and not incur deficits? A) Cash solvency. B) Budgetary solvency. C) Long-run solvency. D) Service-level solvency.
B
Engagements in which auditors provide an examination, a review, or an agreed-upon procedure report on a subject matter or on an assertion about a subject matter are called: A) Financial audits. B) Financial related audits. C) Attestation engagements. D) Performance audits.
C
A General Fund operating deficit as a percentage of operating revenues and transfers: A) Will be negative indicating that the budget will be out of balance. B) May be positive. C) May not indicate a problem if the total of spendable fund balances is adequate to cover the difference. D) None of the above.
C
A budgeting approach that develops balanced scorecards to link financial and nonfinancial indicators of financing, customer satisfaction, internal operations, and the learning and growth of employees is called: A) Program budgeting. B) Planning-programming-budgeting system. C) Entrepreneurial budgeting. D) Zero-based budgeting.
C
A major difference between the conceptual framework followed by the Federal Accounting Standards Advisory Board (FASAB) and that followed by the GASB and FASB is that FASAB concepts: A) Are narrower in that they address only budgetary integrity. B) Number only one compared to several concepts statements issued by the GASB and FASB. C) Are broader and include standards for internal management accounting and performance measurement. D) There are no fundamental differences in the conceptual frameworks of the FASAB, GASB, and FASB.
C
A majority of the members of the Jamestown library board are appointed by the city council of Jamestown, but the city council has no power to remove members for cause (removal requires a recall petition vote by voters of the Library District). The Library District is a separate legal entity. The library board has the power to levy its own property taxes and, with the approval of a majority of registered voters in the district, can issue tax-exempt bonds. Although the Library District must submit an informational copy of its annual budget to the city council, the council's approval is not required. The city has no obligation to subsidize the Library District's operations and has no obligation for its debt. The city has no claim on any financial resources of the Library District. Based on the GAAP criteria for defining the reporting entity it would appear that: A) The city council is able to impose its will on the Library District. B) The Library District is a component unit of the city reporting entity. C) The Library District is not a component unit of the city reporting entity. D) Both A and B are correct.
C
A single audit is required of: A) A federal or nonfederal entity that receives more than $500,000 in a year. B) A nonfederal entity that received more than $100,000 in a year. C) Nonfederal entities that expend $500,000 or more in federal awards in a year. D) Any entity that receives more that $500,000 in federal financial assistance in a year.
C
For which of the following indicators is a trend of decreasing values for the ratio associated with a weaker economic condition? A) The ratio of one-time revenues to operating revenues. B) The ratio of pension obligations to salaries and wages. C) The ratio of revenues to debt principal and interest payments. D) The ratio of current liabilities to operating revenue.
C
GASB defines the probability that a government will meet its financial and service obligations to various constituents, both currently and in the future, as: A) Economic condition. B) Fiscal capacity. C) Financial condition. D) Financial position.
C
Generally accepted government auditing standards (GAGAS) are issued by the: A) American Institute of CPAs (AICPA). B) Office of Management and Budget (OMB). C) Government Accountability Office (GAO). D) Governmental Accounting Standards Board (GASB)
C
If a component unit is, in substance, a part of the primary government, its financial data should be reported: A) In a separate column from that of the primary government. B) By discrete presentation. C) By blending. D) All of the above are acceptable methods of display.
C
In the budget process, some states have legislated ceilings on which of the following? A) Appropriations. B) Capital expenditures. C) Revenues. D) Cash receipts.
C
Statement of Federal Financial Accounting Concepts (SFFAC) No. 4 expands the audiences for the consolidated financial report of the U.S. government to all of the following except: A) Citizen intermediaries. B) Federal executives. C) Tax-exempt bond analysts. D) Program managers.
C
Tax anticipation notes and sweep accounts are important factors to consider when budgeting: A) Revenues. B) Capital expenditures. C) Cash receipts. D) Appropriations.
C
The basic financial statements required by OMB Circular A-136 include each of the following except: A) Statement of budgetary resources. B) Statement of net cost. C) Statement of financing. D) Statement of changes in net position.
C
The dollar value of which of the following asset classes is reported on the face of a federal entity's balance sheet? A) Heritage assets. B) Stewardship land. C) General property, plant and equipment. D) All of the above.
C
The term used in federal agency accounting that is most like Estimated Revenues used in state and local government accounting is: A) Unapportioned authority. B) Fund balance with Treasury. C) Other appropriations realized. D) Taxes receivable.
C
The use of benchmarks to aid interpretation of state and local government ratios for performance analysis can best be described as: A) More widespread for government-wide statements than for fund statements. B) Comparable across states as all local government structures are the same across the country. C) Most easily done by comparing one government to itself over time. D) Easy since data sources useful for comparing one government to its peers are readily available.
C
When reconciling the net change in fund balances on the statement of revenues, expenditures and changes in fund balances—governmental funds to the governmental activities change in net position on the government-wide statement of activities which of the following would be added? A) Depreciation expense for the year. B) The proceeds of new bond issuances. C) Repayment of long-term debt. D) Both A and B are correct statements.
C
Which of the following account names in the United States Government Standard General Ledger (USSGL) refers to the sum of unexpended appropriations and cumulative results of operations? A) Apportionments. B) Entity assets. C) Net position. D) Fund balance.
C
Which of the following is not a true statement regarding a management's discussion and analysis (MD&A) prepared by a state or local government? A) The MD&A should provide an overview of the government's financial activities and financial highlights. B) The MD&A should provide a narrative explanation of the contents of the CAFR. C) The MD&A should provide management's long-term forecast of the government's financial condition. D) The MD&A should describe the government's financial condition, financial trends of the government as a whole and of its major funds, budgetary highlights, and activities affecting capital assets and related debt.
C
Which of the following items is recommended for inclusion in the introductory section of a CAFR? A) Management's discussion and analysis (MD&A). B) Audit report. C) Letter of Transmittal. D) All of these items are recommended for inclusion in the introductory section.
C
Which of the following statements about the single audit is correct? A) It does not apply to nongovernmental not-for-profit organizations. B) It is intended to ensure maximum effectiveness, by conducting audits on a grant-by-grant basis. C) Its purpose is to improve the financial management of state and local government with respect to federal financial assistance programs. D) All of the above are correct.
C
Which of the following statements best describes the order of the planning, budgeting, and performance measurement process in governments? A) Setting strategic direction, measuring results and monitoring performance, evaluating results, planning programs and activities. B) Planning programs and activities, measuring and monitoring performance, evaluating results, setting strategic direction. C) Setting strategic direction, planning programs and activities, measuring results and monitoring performance, evaluating results. D) Assessing performance, setting strategic direction, planning programs and activities, measuring and monitoring performance, evaluating results.
C
Which of the following statements concerning GAGAS requirements for performing financial audits is incorrect? A) During audit planning, the auditors should evaluate whether the audited entity has taken appropriate corrective action to address findings and recommendations from previous engagements that could have a material effect on the financial statements. B) Pertinent information should be communicated to individuals contracting for or requesting the audit. C) Auditors must follow a total of five field work standards. D) Documentation should be provided concerning evidence of supervisory review of work performed.
C
Which of the following terms best describes claims by a reporting entity that arise from transactions among federal entities? A) Entity assets. B) Nonentity assets. C) Intragovernmental assets. D) Governmental assets.
C
A benefit of using activity-based costing in a government is: A) Understanding and controlling the allocation of indirect costs to programs. B) Finding lower cost alternatives. C) Better measures of the cost of service outcomes. D) All of the above.
D
A budgeting approach in which input of resources is related to output of services is called: A) Planning-program-budgeting. B) Incremental budgeting. C) Zero-based budgeting. D) Performance budgeting.
D
A composite reading of the financial health of a government can be useful for: A) Assisting decision makers to compare the government's financial health over time. B) Assisting government managers to compare its financial health to other governments. C) Credit analysts who are comparing a government's financial health to one another. D) All of the above are ways that a composite reading can be useful.
D
A government that is considering privatizing or outsourcing its payroll function should consider which of the following: A) The long-term strategic plan of the government. B) The short- and long-term budgets for general and administrative expenses such as payroll. C) The costs and benefits of performing the activity within the government compared to hiring a company to perform similar activities. D) All of the above.
D
Among other categories, the statistical section of a CAFR prepared in conformity with GASB standards should provide 10-year trend information relating to: A) Financial information. B) Revenue capacity. C) Debt capacity. D) All of the above.
D
An advantage of government-wide financial statements required under the GASB reporting model is: A) Basic financial statements, such as the government-wide statements, use modified accrual accounting and focus on fiscal accountability. B) They show the revenues and expenditures for all governmental, business-type, and fiduciary activities. C) Fund financial statements do not use the accrual basis of accounting and as such are not useful. D) Questions not easily addressed with disaggregated fund financial statements can be answered.
D
Budgeting for performance in a governmental entity is: A) Always separate from the traditional process of budgeting revenues and expenditures to demonstrate compliance with laws and regulations. B) Not evaluated in the GFOA's Distinguished Budget Presentation Award program. C) Not required of governmental entities by their state oversight bodies. D) Focused on improving efficiency and delivering higher quality services to taxpayers.
D
Early warning systems to identify trends or practices that may adversely impact the long- and short-term solvency of a government are: A) Effective if they help decision makers assess solvency; i.e., cash solvency, budgetary solvency, long-run solvency, and service-level solvency. B) Used by government managers as well as credit analysts, oversight bodies, and other decision makers. C) As important today as it they were when the International City/County Management Association (ICMA) developed such a monitoring system in 1980. D) All of the above are true.
D
Engagements in which auditors provide an independent assessment of the management of government programs against objective criteria or best practices are called: A) Attestation engagements. B) Financial related audits. C) Financial audits. D) Performance audits.
D
Financial audits of state and local governments are always performed: A) By external certified public accountants. B) Following generally accepted government auditing standards. C) By state or federal audit agencies. D) None of the above statements is true.
D
For which of the following indicators is a low or decreasing value of the ratio associated with a stronger economic condition? A) The ratio of capital outlays to total operating expenditures. B) The ratio of net revenues to total expenses. C) The ratio of General Fund spendable fund balances to operating revenues. D) The ratio of debt to assessed property values.
D
Management practices and legislative policies of a government are: A) Critical determinants of its financial condition. B) Difficult to measure. C) Examples of organizational factors affecting financial condition. D) All of the above.
D
One of the primary purposes of the Management Discussion and Analysis (MD&A) in the federal financial report as described in Statement of Federal Financial Accounting Concepts (SFFAC) No. 3 is: A) Communicating managers' insights about the reporting entity. B) Increasing the understandability and usefulness of the general purpose federal financial report. C) Providing accessible information about the entity and its operations, service levels, successes, challenges, and future. D) All of the above.
D
Six of the nine members of the board of trustees of the Clinton Sewer District are appointed by the village council of Clinton and the council has the power to remove board members at its discretion. In addition, the village must approve any bond issues of the sewer district and is secondarily obligated to pay debt service on bonds recently issued by the district to construct a new sewage treatment plant, should sewage revenues be insufficient to make principal and interest payments. Based on the GAAP criteria for defining the reporting entity it would appear that: A) Financial data for the sewer district should be reported as part of the Village of Clinton reporting entity. B) The sewer district is financially dependent on the primary government. C) The village has the ability to impose its will on the sewer district. D) All of the above.
D
The 2010 revision of OMB Circular A-136 requires federal agencies to prepare a consolidated performance and accountability report (PAR) that includes the: A) Annual performance report (APR) required by the Government Performance and Results Act of 1994. B) Annual financial statements audited by the Government Accountability Office (GAO). C) Management reports on internal control and other accountability issues. D) All of the above statements are true.
D
The budgeting principle in generally accepted accounting principles (GAAP) for state and local governments requires that: A) The accounting system should provide the basis for appropriate budgetary control. B) Budgetary comparison schedules should be presented as required supplementary information for the General Fund and each major special revenue fund that has a legally adopted budget. C) Annual budgets should be adopted by each government. D) All of the above.
D
The importance of the Comptroller General as one of the three principals of the Joint Financial Management Improvement Program (JFMIP) is that he or she: A) Gathers information for the House and Senate budget committees with respect to the budget, appropriation bills, and other bills providing budget authority. B) Is the direct representative of the President, and, as such, has the authority to control the size and nature of appropriations requested of each Congress. C) Is part of the executive branch of the federal government with responsibility for receiving, keeping, and disbursing monies of the United States. D) Has responsibility for prescribing the accounting principles, standards, and other requirements to be observed by each federal agency.
D
The term that best describes the amount of the entity's appropriations represented by undelivered orders and unobligated balances is: A) Commitments. B) Cumulative results of operations. C) Net position. D) Unexpended appropriations.
D
Under GASB standards, the financial section of a comprehensive annual financial report (CAFR) includes: A) Basic financial statements that include both government-wide and fund financial statements. B) Combining statements and individual fund statements. C) Required supplementary information. D) All of the above.
D
When used in governments, total quality management (TQM): A) Is consistent with program budgeting approaches. B) Seeks to continuously improve the government's ability to meet or exceed demands from taxpayers and service recipients. C) Links taxpayer and other resource provider satisfaction to improvements in the operating systems and processes used to provide goods and services. D) All of the above.
D
Which of the following budgetary track accounts is most similar to the Appropriations account used by state and local governments? A) Appropriations Used B) Expended Authority. C) Obligations. D) Unapportioned Authority.
D
Which of the following fund balance classifications would be used by the city's permanent fund to report its endowment resources on its balance sheet? A) Restricted fund balance. B) Committed fund balance. C) Assigned fund balance. D) Nonspendable fund balance.
D
Which of the following is a critical component of service efforts and accomplishments (SEA) measures in governments? A) Service efforts, such as resources used. B) Efficiency and outcome measures that relate service efforts to accomplishments. C) Service accomplishments, such as outputs and outcomes. D) All of the above.
D
Which of the following is a true statement about budgeting cash disbursements in a governmental entity? A) Budgeting for cash receipts and cash disbursements should be no more frequent than once a month. B) Disbursements in most governments are clustered in two months of the year, while revenues are more evenly distributed throughout the year. C) Disbursements of each fund should be considered separately and in separate bank accounts. D) None of the above statements are true.
D
Which of the following is not typically one of the functions of the audit committee of a governing board? A) Select the auditor. B) Monitor the audit process. C) Participate with management and the independent auditor in resolving internal control deficiencies. D) Propose adjusting journal entries.
D
Which of the following statements is not true about selecting federal award programs to be audited in a single audit? A) At least 50 percent of total federal awards expended must be audited. B) A risk-based approach is used for selecting major programs for audit. C) Low risk programs include those that have previously been audited with no audit findings, and are relatively stable, among other considerations. D) A major program is one that is large and relatively risky and always includes new programs.
D
Which of the following statements is true about the U.S. government-wide financial statements? A) The audited financial statements of the U.S. government have received disclaimers of opinion from the Government Accountability Office (GAO) for each year that they have been issued. B) The majority of federal agencies audited receive unqualified opinions. C) The U.S. government first issued audited annual financial statements for fiscal year 1997. D) All of the above
D
Which of the following statements is true regarding required supplementary information (RSI)? A) RSI includes the Management's Discussion and Analysis (MD&A) and budgetary comparison schedules. B) Auditors apply certain limited procedures to RSI to provide assurance that it is fairly presented in relation to the basic financial statements. C) Auditors do not render an opinion on RSI. D) All of the above are true.
D
