CDFM Exam Module 3:4 (Auditing)
Questions and Answers
What did the Chief Financial Officers (CFO) Act of 1990 required - ANS-Federal
agencies were to prepare financial statements subjected to audits and each of the 24
largest federal dept or agencies were to create CFO positions.
What is the role of the Deputy Director for Management - ANS-They represent the chief
government official and is responsible for financial management with the Executive
Branch of the government
What is the lasting impact of the CFO Act - ANS-It transformed federal financial
management from a backroom function to boardroom function.
What is the primary function of a financial statement audit - ANS-To attain an
unqualified opinion that an entity's financial statements are presented fairly and in
conformity with applicable financial reporting framework.
Financial Improvement and Audit Readiness (FAIR) Program - ANS-The strategic, long-
term plan devised by DoD to produce the required auditable financial statements
GAGAS - ANS-Generally Accepted Government Audit Standards
GAGAS is also referred to as - ANS-Yellow Books
How many waves does FAIR strategy contain - ANS-4 waves, the first three are to be
performed concurrently because they focus on the USD(C) priorities.
What is audit risk in field work standards - ANS-the possibility that finding, conclusion,
recommendations, or assurance may be improper or incomplete.
What is the function of the Yellow Book (GAO) reporting standards - ANS-To Provide
guidance for auditors to follow when writing audit and attestation engagement reports.
What are the four (4) FINANCIAL AUDITS reporting standards for Yellow Book (GAO) -
ANS-1) Compliance with generally accepted accounting principles (GAAP)
2)Consistency of application of accounting principles
3) Whether management's disclosures are reasonable adequate
4) Type of auditor opinion
, What are the three (3) PERFORMANCE AUDITS reporting standards for Yellow Book
(GAO) - ANS-1) Form of report (writing or other retrievable form)
2) Content
3) Distribution of report (usually available to public)
**Inspector General Act of 1978 - ANS-Requires that the Federal Inspector General
comply with the Comptroller General's standards for audits.
**The DoD Inspector General (IG) - ANS-Serves as an independent and objective
official in DoD
** Key function of the DoD IG - ANS-Conducts, supervises, monitors and initiates audits
and investigations related to DoD programs and operations
**How is quality control audits for DoD achieved? - ANS-Through the establishment of a
quality control program based on GAGAS guidance.
Where are the MAIN internal audit organizations within DoD - ANS-1) Office of Assistant
Inspector General for Auditing (OIG, DoD)
2) The Army Audit Agency
3)The Naval Audit Services
4) The Air force Audit Agency
Who does the DoD central internal audit organizations report to - ANS-The head of their
respective components
To ensure independence, who does the DoD audit organizations report Directly to? -
ANS-The Secretary/Under Sec of the DoD Component.
Which other organization performs audits of DoD organizations - ANS-Government
Accountability Office (GAO) ----mostly on performance audits such as procurement,
logistics, human resources readiness, etc.
DoD Internal Audits ensures that - ANS-Plans are established, written policies and
procedures are provided and Fraud, waste, and abuse are minimized.
When can DoD contract for Audit services - ANS-When expertise is not available within
DoD and when temporary assistance is required.
Name the three types of Auidits - ANS-Financial, performance and Attestation
Engagement
When and/or why are audits initiated - ANS-By basic Legislative authority or in response
to Congressional or other requests
**70% is either requested or directed by law*
Questions and Answers
What did the Chief Financial Officers (CFO) Act of 1990 required - ANS-Federal
agencies were to prepare financial statements subjected to audits and each of the 24
largest federal dept or agencies were to create CFO positions.
What is the role of the Deputy Director for Management - ANS-They represent the chief
government official and is responsible for financial management with the Executive
Branch of the government
What is the lasting impact of the CFO Act - ANS-It transformed federal financial
management from a backroom function to boardroom function.
What is the primary function of a financial statement audit - ANS-To attain an
unqualified opinion that an entity's financial statements are presented fairly and in
conformity with applicable financial reporting framework.
Financial Improvement and Audit Readiness (FAIR) Program - ANS-The strategic, long-
term plan devised by DoD to produce the required auditable financial statements
GAGAS - ANS-Generally Accepted Government Audit Standards
GAGAS is also referred to as - ANS-Yellow Books
How many waves does FAIR strategy contain - ANS-4 waves, the first three are to be
performed concurrently because they focus on the USD(C) priorities.
What is audit risk in field work standards - ANS-the possibility that finding, conclusion,
recommendations, or assurance may be improper or incomplete.
What is the function of the Yellow Book (GAO) reporting standards - ANS-To Provide
guidance for auditors to follow when writing audit and attestation engagement reports.
What are the four (4) FINANCIAL AUDITS reporting standards for Yellow Book (GAO) -
ANS-1) Compliance with generally accepted accounting principles (GAAP)
2)Consistency of application of accounting principles
3) Whether management's disclosures are reasonable adequate
4) Type of auditor opinion
, What are the three (3) PERFORMANCE AUDITS reporting standards for Yellow Book
(GAO) - ANS-1) Form of report (writing or other retrievable form)
2) Content
3) Distribution of report (usually available to public)
**Inspector General Act of 1978 - ANS-Requires that the Federal Inspector General
comply with the Comptroller General's standards for audits.
**The DoD Inspector General (IG) - ANS-Serves as an independent and objective
official in DoD
** Key function of the DoD IG - ANS-Conducts, supervises, monitors and initiates audits
and investigations related to DoD programs and operations
**How is quality control audits for DoD achieved? - ANS-Through the establishment of a
quality control program based on GAGAS guidance.
Where are the MAIN internal audit organizations within DoD - ANS-1) Office of Assistant
Inspector General for Auditing (OIG, DoD)
2) The Army Audit Agency
3)The Naval Audit Services
4) The Air force Audit Agency
Who does the DoD central internal audit organizations report to - ANS-The head of their
respective components
To ensure independence, who does the DoD audit organizations report Directly to? -
ANS-The Secretary/Under Sec of the DoD Component.
Which other organization performs audits of DoD organizations - ANS-Government
Accountability Office (GAO) ----mostly on performance audits such as procurement,
logistics, human resources readiness, etc.
DoD Internal Audits ensures that - ANS-Plans are established, written policies and
procedures are provided and Fraud, waste, and abuse are minimized.
When can DoD contract for Audit services - ANS-When expertise is not available within
DoD and when temporary assistance is required.
Name the three types of Auidits - ANS-Financial, performance and Attestation
Engagement
When and/or why are audits initiated - ANS-By basic Legislative authority or in response
to Congressional or other requests
**70% is either requested or directed by law*
