CGFM Internal Controls and Government Auditing

Question 1

Which publication defines the standards for internal control in the federal government, commonly known as the 'Green Book'?

Accepted Answer

GAO's Standards for Internal Control in the Federal Government

Answer

OMB Circular A-123

Answer

FASAB SFFAS No. 7

Answer

FFMIA of 1996

Question 2

What are the five components of internal control identified in the Green Book?

Accepted Answer

Control Environment, Risk Assessment, Control Activities, Information and Communication, Monitoring

Answer

Planning, Budgeting, Reporting, Auditing, Compliance

Answer

Authorization, Recording, Reporting, Reviewing, Correcting

Answer

Leadership, Operations, Finance, Compliance, Ethics

Question 3

Which law requires federal agencies to annually assess and report on the effectiveness of their internal controls over financial reporting?

Accepted Answer

Federal Managers' Financial Integrity Act of 1982

Answer

Chief Financial Officers Act of 1990

Answer

Inspector General Act of 1978

Answer

Government Performance and Results Act of 1993

Question 4

What is the purpose of the Single Audit Act?

Accepted Answer

To require non-federal entities that expend significant federal awards to undergo a comprehensive audit

Answer

To consolidate all federal audits into one annual audit by GAO

Answer

To eliminate duplicate audits of federal agencies

Answer

To standardize financial statements for all government entities

Question 5

In government auditing, what does 'GAGAS' stand for?

Accepted Answer

Generally Accepted Government Auditing Standards

Answer

Government Agency and Grant Auditing Standards

Answer

General Accountability and Government Audit Standards

Answer

Government Approved GAAP Auditing Standards

Question 6

What is a 'material weakness' in the context of internal controls?

Accepted Answer

A deficiency or combination of deficiencies that creates a reasonable possibility of a material misstatement not being prevented or detected

Answer

A minor error in financial reporting

Answer

A budget variance exceeding 5%

Answer

An unauthorized transaction under $10,000