CDFM Auditing and Internal Controls 5

Question 1

Which of the following is an example of a compensating control in a DoD environment where full segregation of duties cannot be achieved due to limited staffing?

Accepted Answer

Supervisory review of all transactions processed by one individual

Answer

A compensating control, such as supervisory review, mitigates the risk created when ideal segregation of duties cannot be implemented due to resource constraints.

Question 2

Under GAGAS, how long must auditors retain documentation supporting their audit conclusions?

Accepted Answer

Five years from the report date

Answer

GAGAS requires that audit documentation be retained for a minimum of five years from the date of the audit report, unless a longer period is required by law or regulation.

Question 3

In DoD financial management, what is the primary purpose of a reconciliation control?

Accepted Answer

To compare two sets of records to verify they agree and investigate differences

Answer

Reconciliation controls compare related records (e.g., DFAS records vs. property records) to identify and resolve discrepancies, reducing the risk of undetected errors.

Question 4

The concept of 'reasonable assurance' in internal control means that:

Accepted Answer

Controls reduce risk to an acceptable level but cannot eliminate all risk

Answer

Reasonable assurance acknowledges that no control system can prevent all errors and fraud; controls are designed to reduce risks to an acceptable level given cost-benefit considerations.

Question 5

Which DoD policy requires that all employees who certify the availability of funds be held accountable for Anti-Deficiency Act violations?

Accepted Answer

DoD FMR Volume 3, Chapter 8

Answer

DoD FMR Volume 3, Chapter 8 governs funds control and the accountability of certifying officials who confirm funds availability, including ADA violation consequences.

CDFM - Certified Defense Financial Manager Practice Test

CDFM - Certified Defense Financial Manager Practice Test

CDFM Auditing and Internal Controls 5