CGAP MCQ 2

Question 1

Which type of government audit focuses on whether programs are achieving their intended results?

Accepted Answer

Performance audit

Answer

Performance audits examine whether government programs are effective, efficient, and achieving their stated objectives.

Question 2

Under the Yellow Book, which standard requires auditors to report all known or likely fraud affecting the financial statements?

Accepted Answer

Reporting standards

Answer

Yellow Book reporting standards require auditors to communicate fraud findings that are material to the financial statements.

Question 3

A government auditor discovers that a department head has been approving her own expense reimbursements. This is best described as:

Accepted Answer

A segregation of duties weakness

Answer

Allowing one person to both initiate and approve transactions violates the segregation of duties internal control principle.

Question 4

In government auditing, 'materiality' for a compliance audit is typically determined based on:

Accepted Answer

Quantitative and qualitative factors related to the specific law or regulation

Answer

Compliance audit materiality considers both quantitative thresholds and qualitative factors such as the sensitivity of the legal requirement.

Question 5

Which element is NOT typically included in a government audit report prepared under GAGAS?

Accepted Answer

Management's corrective action plan

Answer

Management's corrective action plan may be included as a response but is not a required element of the auditor's report under GAGAS.

CGAP - Certified Government Auditing Professional Practice Test