CGFM Exam 3 with Verified Answers
What is an audit? - Answers -an independent, systematic, objective, unbiased
assessment that provides answers to a set of questions (audit objectives).
auditors assess whether financial statements are presented fairly in all material
respects, providing reasonable assurance of their correctness
Financial Audits - Answers -Provides reasonable assurance on whether financial
statements are presented fairly in conformity with GAAP. in all material respects - the
financial conditions, results, and use of resources of the entity
Performance Audit Questions - Answers -Was this organization operating in an
economical manner?
Did this organization achieve its program objectives?
Did the cost claimed under a federal grant conform to the grant requirements?
Was the program operated in compliance with laws and regulations?
Material - Answers -in the context of whether a reasonable and informed third party
would consider that an omission or misstatement would change their opinions regarding
the auditor's conclusions
State and Local Governments are required to report on the following units: - Answers --
Primary Government - Government Wide Level
- Primary Government - Fund Level
- Component Units
Opinions are required for: - Answers -- Governmental Activities
- Business Type Activities
- Each major governmental and enterprise major fund
- The aggregated remaining fund information
An examination results in an - Answers -opinion
A review engagement results in a - Answers -conclusion
An agreed-upon procedures results in - Answers -findings
Significance - Answers -The relative importance of a matter within the context in which it
is being considered
Auditors may conduct the following types of engagements - Answers -financial audits
, assentation engagement and reviews of financial statements
performance audits
Financial Audits - Answers -auditors express an opinion on where the statemtn preset
fairly in all material respects the finanical position of the auditee at a point in time for the
fiscal period then ended
AICPA - Answers -American Institute of Certified Public Accountants
issued standards for financial statement audit engagements. Set forth in the Statement
on Auditing Standards (SAS)
FASB - Answers -Financial Accounting Standards Board ; public and private companies
and non for profit organizations use GAAP established by FASB
GASB - Answers -Governmental Accounting Standards Board
-State and local governmental organizations use GASB
FASAB - Answers -Federal Accounting Standards Advisory Board
- Federal government used GAAP by FASAB
Assentation Engagements and Reviews of Financial Statements - Answers -Can cover
a range of financial and nonfinancial objectives based on the users needs. Standards
are issued by AICPA in the Statements on Standards for Assentation Engagement
(SSAE). Often performed as stand alone engagement
Three types of Assentation Engagements - Answers -Examination
Review
Agreed-upon Procedures Engagement
Examination - Answers -auditor obtains a reasonable assurance by obtaining sufficient,
appropriate evidence about the measurement or evaluation of a subject matter in order
to draw a reasonable conclusion to base the auditors opinion. Same level of assurance
as a financial statement audit
Review - Answers -auditor obtains limited assurance. Does not include reporting on
internal controls or compliance with provisions of laws, regulations, contracts, and grant
agreements. Same level of assurance as a financial statement audit
Agreed-upon Procedures Engagement - Answers -auditors perform specific procedures
on subject matter or an assertion and reports the finding without providing an opinion or
a conclusion on it. Specific parties are the intended users for which the report is limited.
Possible subjects for Assentation Engagements - Answers -- historical or prospective
performance or condition, financial information, performance measurement, or backlog
data
- physical characteristics
What is an audit? - Answers -an independent, systematic, objective, unbiased
assessment that provides answers to a set of questions (audit objectives).
auditors assess whether financial statements are presented fairly in all material
respects, providing reasonable assurance of their correctness
Financial Audits - Answers -Provides reasonable assurance on whether financial
statements are presented fairly in conformity with GAAP. in all material respects - the
financial conditions, results, and use of resources of the entity
Performance Audit Questions - Answers -Was this organization operating in an
economical manner?
Did this organization achieve its program objectives?
Did the cost claimed under a federal grant conform to the grant requirements?
Was the program operated in compliance with laws and regulations?
Material - Answers -in the context of whether a reasonable and informed third party
would consider that an omission or misstatement would change their opinions regarding
the auditor's conclusions
State and Local Governments are required to report on the following units: - Answers --
Primary Government - Government Wide Level
- Primary Government - Fund Level
- Component Units
Opinions are required for: - Answers -- Governmental Activities
- Business Type Activities
- Each major governmental and enterprise major fund
- The aggregated remaining fund information
An examination results in an - Answers -opinion
A review engagement results in a - Answers -conclusion
An agreed-upon procedures results in - Answers -findings
Significance - Answers -The relative importance of a matter within the context in which it
is being considered
Auditors may conduct the following types of engagements - Answers -financial audits
, assentation engagement and reviews of financial statements
performance audits
Financial Audits - Answers -auditors express an opinion on where the statemtn preset
fairly in all material respects the finanical position of the auditee at a point in time for the
fiscal period then ended
AICPA - Answers -American Institute of Certified Public Accountants
issued standards for financial statement audit engagements. Set forth in the Statement
on Auditing Standards (SAS)
FASB - Answers -Financial Accounting Standards Board ; public and private companies
and non for profit organizations use GAAP established by FASB
GASB - Answers -Governmental Accounting Standards Board
-State and local governmental organizations use GASB
FASAB - Answers -Federal Accounting Standards Advisory Board
- Federal government used GAAP by FASAB
Assentation Engagements and Reviews of Financial Statements - Answers -Can cover
a range of financial and nonfinancial objectives based on the users needs. Standards
are issued by AICPA in the Statements on Standards for Assentation Engagement
(SSAE). Often performed as stand alone engagement
Three types of Assentation Engagements - Answers -Examination
Review
Agreed-upon Procedures Engagement
Examination - Answers -auditor obtains a reasonable assurance by obtaining sufficient,
appropriate evidence about the measurement or evaluation of a subject matter in order
to draw a reasonable conclusion to base the auditors opinion. Same level of assurance
as a financial statement audit
Review - Answers -auditor obtains limited assurance. Does not include reporting on
internal controls or compliance with provisions of laws, regulations, contracts, and grant
agreements. Same level of assurance as a financial statement audit
Agreed-upon Procedures Engagement - Answers -auditors perform specific procedures
on subject matter or an assertion and reports the finding without providing an opinion or
a conclusion on it. Specific parties are the intended users for which the report is limited.
Possible subjects for Assentation Engagements - Answers -- historical or prospective
performance or condition, financial information, performance measurement, or backlog
data
- physical characteristics
