CGAP Auditing & Corporate Governance 3

Question 1

Which of the following BEST describes 'performance auditing' in the public sector?

Accepted Answer

Evaluating economy, efficiency, and effectiveness of government programs

Answer

Performance auditing (value-for-money auditing) examines whether government programs achieve their intended outcomes economically, efficiently, and effectively.

Question 2

Under GAGAS, independence is required for which types of engagements?

Accepted Answer

All GAGAS audit and attestation engagements

Answer

GAGAS requires auditors to be independent for all audit and attestation engagements, covering financial, performance, and attestation work.

Question 3

A government auditor discovers that a program manager has not complied with a federal grant requirement. This finding should be reported as a:

Accepted Answer

Instance of noncompliance

Answer

Failure to comply with laws, regulations, or grant requirements is classified and reported as noncompliance in government audit reports.

Question 4

The Sarbanes-Oxley Act (SOX) Section 404 requirement for management to assess internal controls over financial reporting most directly influenced public sector auditing by:

Accepted Answer

Raising expectations for internal control documentation and testing in government entities

Answer

SOX's rigorous internal control assessment standards raised the bar for documentation and testing expectations in both private and public sector contexts.

Question 5

Which reporting element is unique to government audit reports under GAGAS compared to private sector audit reports?

Accepted Answer

Statement on compliance with laws and regulations

Answer

GAGAS requires auditors to report on compliance with laws, regulations, and provisions of contracts or grant agreements, which is not standard in private sector audits.

CGAP - Certified Government Auditing Professional Practice Test

CGAP - Certified Government Auditing Professional Practice Test

CGAP Auditing & Corporate Governance 3