CDFM - Certified Defense Financial Manager Auditing and Internal Controls Questions and Answers

Question 1

Which of the following sets of standards, often called the 'Green Book', is issued by the Government Accountability Office (GAO) and establishes the framework for an effective internal control system for federal agencies?

Accepted Answer

Standards for Internal Control in the Federal Government

Answer

Generally Accepted Accounting Principles (GAAP)

Answer

Government Auditing Standards (The Yellow Book)

Answer

Federal Financial Management System Requirements (FFMSR)

Question 2

A DoD component head is preparing the annual Statement of Assurance as required by the Federal Managers' Financial Integrity Act (FMFIA). The evaluation identified a material weakness in inventory accountability. However, all other internal controls are designed and operating effectively. What type of assurance should the component head provide?

Accepted Answer

Modified Statement of Assurance

Answer

Unmodified Statement of Assurance

Answer

Statement of No Assurance

Answer

Disclaimer of Opinion

Question 3

An audit is being conducted to determine if a DoD program is achieving its objectives in an economical and efficient manner and is producing the intended results. According to Government Auditing Standards (the Yellow Book), what type of audit is this?

Accepted Answer

Performance Audit

Answer

Financial Audit

Answer

Attestation Engagement

Answer

Compliance Audit

Question 4

A financial management office has a process where one employee is responsible for authorizing payments, disbursing the funds, and recording the transactions in the general ledger. Which of the five components of internal control, as defined by the GAO Green Book, is most clearly violated by this practice?

Accepted Answer

Control Activities

Answer

Risk Assessment

Answer

Monitoring

Answer

Control Environment

Question 5

What is the primary purpose of the Government Auditing Standards, also known as the 'Yellow Book'?

Accepted Answer

To provide a framework for conducting high-quality audits of government entities with competence, integrity, and independence.

Answer

To provide detailed procedures for filing appropriations requests with Congress.

Answer

To set the standards for an agency's internal control system design and implementation.

Answer

To establish the accounting principles for preparing federal financial statements.

Question 6

The Federal Managers' Financial Integrity Act (FMFIA) requires the head of each executive agency to annually evaluate and report on the effectiveness of which two major areas?

Accepted Answer

Internal Controls and Financial Management Systems

Answer

Programmatic Efficiency and Employee Morale

Answer

Strategic Planning and Public Relations

Answer

Contract Negotiation and Vendor Management