CGAP Auditing & Corporate Governance 5

Question 1

A government auditor's 'professional skepticism' is BEST demonstrated by:

Accepted Answer

Critically assessing audit evidence without accepting it at face value, regardless of past experience

Answer

Professional skepticism means maintaining a questioning mind and critically evaluating evidence, neither assuming honesty nor dishonesty by default.

Question 2

Under the Single Audit Act, a 'major program' determination is significant because:

Accepted Answer

Major programs must be audited in detail for compliance with federal requirements

Answer

The Single Audit Act requires detailed compliance auditing of major federal programs to ensure grant funds are used in accordance with applicable requirements.

Question 3

Which governance body characteristic MOST supports audit committee effectiveness in a public sector entity?

Accepted Answer

Members have financial expertise and serve independently from management

Answer

An effective audit committee requires members with financial expertise who are independent from management to provide objective oversight.

Question 4

In government performance auditing, 'economy' is measured by examining:

Accepted Answer

Whether inputs (resources) are acquired at the lowest reasonable cost while meeting quality standards

Answer

Economy focuses on input acquisition — obtaining the right quality and quantity of resources at the lowest reasonable cost.

Question 5

When a government internal auditor has a 'self-review threat' to independence, the BEST mitigation is to:

Accepted Answer

Assign a different auditor who had no involvement in the work being reviewed

Answer

The most effective mitigation for a self-review threat is removing the auditor from reviewing their own prior work and assigning an independent auditor.

CGAP - Certified Government Auditing Professional Practice Test

CGAP - Certified Government Auditing Professional Practice Test

CGAP Auditing & Corporate Governance 5