CDFM Auditing and Internal Controls 2

Question 1

Under the Government Accountability Office (GAO) Yellow Book standards, which type of audit opinion is issued when the auditor concludes that financial statements are fairly presented in all material respects?

Accepted Answer

Unmodified (unqualified) opinion

Answer

An unmodified (unqualified) opinion indicates the financial statements are fairly presented in accordance with the applicable financial reporting framework.

Question 2

The Defense Contract Audit Agency (DCAA) performs audits primarily under which authority?

Accepted Answer

Federal Acquisition Regulation (FAR) Part 42

Answer

DCAA performs contract audits for DoD and other federal agencies under FAR Part 42, which governs contract administration and audit functions.

Question 3

Which internal control component of the COSO framework addresses the organization's objectives, risk tolerance, and the oversight responsibilities of the board?

Accepted Answer

Control Environment

Answer

The Control Environment sets the tone of an organization and is the foundation for all other components, encompassing governance, ethical values, and accountability.

Question 4

A DoD financial manager discovers that a control deficiency exists but believes it is unlikely to result in a material misstatement. This deficiency is best classified as a:

Accepted Answer

Control deficiency

Answer

A control deficiency exists when the design or operation of a control does not allow management to prevent or detect misstatements on a timely basis, but without the severity of a significant deficiency or material weakness.

Question 5

Which audit standard requires auditors of federal entities to maintain independence in both fact and appearance?

Accepted Answer

GAGAS (Generally Accepted Government Auditing Standards)

Answer

GAGAS (Yellow Book) requires auditors to be independent in fact and appearance, addressing both organizational and personal independence for government audits.

CDFM - Certified Defense Financial Manager Practice Test

CDFM - Certified Defense Financial Manager Practice Test

CDFM Auditing and Internal Controls 2