CGAP Performance Auditing in Government 2

Question 1

In a performance audit, the 'condition' element of a finding refers to:

Accepted Answer

The situation as it actually exists based on audit evidence

Answer

The root cause of an identified problem

Answer

The applicable law or regulation governing the program

Answer

The auditor's recommendation for corrective action

Question 2

Which statement best describes the role of 'materiality' in a government performance audit?

Accepted Answer

Auditors must consider whether findings are significant enough to affect the user's decision-making or understanding of the program

Answer

Materiality applies only to dollar thresholds and is irrelevant in performance audits

Answer

Materiality is determined solely by agency management

Answer

All findings must be reported regardless of their significance

Question 3

An auditor conducting a performance audit selects a program to benchmark against similar programs in other states. This technique is called:

Accepted Answer

Benchmarking

Answer

Regression analysis

Answer

Stratified sampling

Answer

Root cause analysis

Question 4

Under GAGAS, which of the following represents a threat to an auditor's independence in a performance audit?

Accepted Answer

Having previously designed the internal controls being audited

Answer

Reviewing prior audit reports on the same program

Answer

Interviewing program beneficiaries for qualitative data

Answer

Using a multi-disciplinary team that includes non-accountants

Question 5

What is the primary purpose of an 'audit objective' in a performance audit?

Accepted Answer

To clearly state what the audit is intended to answer or accomplish

Answer

To define the scope of financial transactions to be tested

Answer

To list the auditing standards that will be applied

Answer

To specify the dollar threshold for materiality

Question 6

When assessing program efficiency in a performance audit, an auditor would most likely examine:

Accepted Answer

The ratio of program outputs produced per unit of resource consumed

Answer

Whether the program's financial statements are free from material misstatement

Answer

Whether program funds were spent in compliance with appropriations laws

Answer

The qualifications and independence of program management

Question 7

Which of the following is the most appropriate method for establishing cause in a performance audit finding?

Accepted Answer

Using audit evidence to identify the systemic factors or decisions that led to the condition

Answer

Accepting management's explanation without corroboration

Answer

Referring the matter to a law enforcement agency

Answer

Calculating the statistical significance of the variance