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

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.

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

An audit finding is a significant deficiency, material weakness, noncompliance, questioned cost, or abuse identified during the audit that must be communicated to management.

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

Questioned costs are costs examined during an audit that the auditor believes may not comply with applicable requirements, including costs lacking adequate documentation.

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 control environment is the foundation of all other internal control components, encompassing management's philosophy, ethical values, organizational structure, and commitment to competence.

Question 5

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

Accepted Answer

Unmodified opinion

Answer

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.

CGFM - Certified Government Financial Manager Practice Test

CGFM - Certified Government Financial Manager Practice Test

CGFM Internal Controls and Government Auditing 3