CGFM Ethics, Accountability, and Professional Standards 1 — Questions and Answers
Question 1: What is the primary purpose of the Government Finance Officers Association (GFOA) in relation to governmental accounting?
- Setting legally binding accounting standards
- Promoting excellence in government finance through education, best practices, and the Certificate of Achievement for Excellence in Financial Reporting program (Correct answer)
- Auditing state and local government financial statements
- Setting federal budget policy
Correct answer: Promoting excellence in government finance through education, best practices, and the Certificate of Achievement for Excellence in Financial Reporting program
GFOA promotes sound financial management in government through professional development, best practice guidance, and its Certificate of Achievement program recognizing high-quality financial reports.
Question 2: Which of the following best describes the concept of 'stewardship' in governmental financial management?
- Managing government investments in private companies
- The responsibility of public officials to manage and account for public resources on behalf of citizens (Correct answer)
- Maintaining physical custody of government assets
- Preparing the annual budget request
Correct answer: The responsibility of public officials to manage and account for public resources on behalf of citizens
Stewardship in government means public officials are responsible for managing public resources entrusted to them by citizens and must account for how those resources are used.
Question 3: The CGFM certification is awarded by which organization?
- Government Finance Officers Association (GFOA)
- Association of Government Accountants (AGA) (Correct answer)
- American Institute of CPAs (AICPA)
- National Association of State Auditors
Correct answer: Association of Government Accountants (AGA)
The Certified Government Financial Manager (CGFM) designation is awarded by the Association of Government Accountants (AGA) to professionals who pass three exams and meet experience requirements.
Question 4: What is 'public accountability' in the context of government financial management?
- Paying all government debts on time
- The obligation of government officials to explain and justify their stewardship of public resources to citizens and oversight bodies (Correct answer)
- Filing accurate tax returns
- Maintaining balanced budgets
Correct answer: The obligation of government officials to explain and justify their stewardship of public resources to citizens and oversight bodies
Public accountability requires government officials to explain how they have used public resources and demonstrate that programs are achieving intended results.
Question 5: Which ethical standard is fundamental to government financial management and requires avoiding conflicts of interest?
- Efficiency
- Objectivity and independence (Correct answer)
- Cost minimization
- Risk tolerance
Correct answer: Objectivity and independence
Objectivity and independence require government financial managers to base decisions on facts and professional judgment, free from personal interests or undue influence.
Question 6: What does 'transparency' mean as an ethical principle in governmental financial management?
- Publishing all employee salaries online
- Making financial information clear, complete, accurate, and accessible to enable informed decisions by stakeholders (Correct answer)
- Disclosing all internal audit findings publicly
- Sharing all budget negotiations with the public
Correct answer: Making financial information clear, complete, accurate, and accessible to enable informed decisions by stakeholders
Financial transparency means providing stakeholders with accurate, complete, and accessible financial information to support public accountability and informed decision-making.
CGFM Ethics, Accountability, and Professional Standards 1
What is the primary purpose of the Government Finance Officers Association (GFOA) in relation to governmental accounting?