CGFM Internal Controls and Government Auditing 3

Question 1

What is an 'improper payment' as defined by the Improper Payments Information Act?

Accepted Answer

A payment that should not have been made, was made in an incorrect amount, or was made to an ineligible recipient

Answer

Any payment made to a contractor

Answer

A payment not supported by a contract

Answer

A payment exceeding $1 million

Question 2

In a government audit, what is an 'audit finding'?

Accepted Answer

A deficiency, noncompliance, or abuse identified during the audit that must be reported

Answer

The auditor's unmodified opinion on financial statements

Answer

A summary of audit procedures performed

Answer

The agency's response to the audit

Question 3

What is 'questioned costs' in a federal grant audit?

Accepted Answer

Costs that are questioned because of an alleged violation of law, regulation, or contract terms, or lack of documentation

Answer

Costs that exceeded the grant budget

Answer

Costs that the auditor could not verify due to missing records

Answer

Costs that were disallowed by the granting agency

Question 4

What is the 'control environment' component of internal control?

Accepted Answer

The foundation of internal control, set by management's tone and commitment to integrity, ethics, and competence

Answer

The physical security of financial records

Answer

The IT systems used to process financial transactions

Answer

The external audit requirements imposed on the agency

Question 5

Which type of audit opinion is issued when financial statements are presented fairly in all material respects?

Accepted Answer

Unmodified opinion

Answer

Adverse opinion

Answer

Disclaimer of opinion

Answer

Qualified opinion

Question 6

What is the purpose of a 'corrective action plan' following an audit finding?

Accepted Answer

To document how management will address the audit finding and timeline for remediation

Answer

To appeal the audit finding to a higher authority

Answer

To request additional funding to fix identified problems

Answer

To assign blame for the control deficiency