Internal Controls and Government Auditing Flashcards
6 cards from real CGFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Internal Controls and Government Auditing flashcards as text
What is an 'improper payment' as defined by the Improper Payments Information Act?
Answer: A payment that should not have been made, was made in an incorrect amount, or was made to an ineligible recipient
An improper payment is any payment that should not have been made, was made in the wrong amount, or was made to an ineligible recipient, including duplicate payments.
In a government audit, what is an 'audit finding'?
Answer: A deficiency, noncompliance, or abuse identified during the audit that must be reported
An audit finding is a significant deficiency, material weakness, noncompliance, questioned cost, or abuse identified during the audit that must be communicated to management.
What is 'questioned costs' in a federal grant audit?
Answer: Costs that are questioned because of an alleged violation of law, regulation, or contract terms, or lack of documentation
Questioned costs are costs examined during an audit that the auditor believes may not comply with applicable requirements, including costs lacking adequate documentation.
What is the 'control environment' component of internal control?
Answer: The foundation of internal control, set by management's tone and commitment to integrity, ethics, and competence
The control environment is the foundation of all other internal control components, encompassing management's philosophy, ethical values, organizational structure, and commitment to competence.
Which type of audit opinion is issued when financial statements are presented fairly in all material respects?
Answer: Unmodified opinion
An unmodified (or clean) opinion means the auditor has concluded that the financial statements are presented fairly in all material respects in accordance with GAAP.
What is the purpose of a 'corrective action plan' following an audit finding?
Answer: To document how management will address the audit finding and timeline for remediation
A corrective action plan outlines the specific steps management will take to address audit findings, responsible parties, and target completion dates.
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