CGFM CGFM 5 — Questions and Answers
Question 1: Under GASB 68, state and local government employers must report their proportionate share of a cost-sharing pension plan's:
- Total pension liability only
- Net pension liability on the face of the financial statements (Correct answer)
- Pension expense as a footnote only
- Funded ratio as a supplementary schedule
Correct answer: Net pension liability on the face of the financial statements
GASB 68 requires employers to recognize their proportionate share of the collective net pension liability directly on the Statement of Net Position.
Question 2: Which internal audit standard requires that internal auditors be free from conditions that threaten their ability to carry out their responsibilities objectively?
- The standard of due professional care
- The standard of independence (Correct answer)
- The standard of proficiency
- The standard of scope of work
Correct answer: The standard of independence
The IIA standard on independence requires that internal audit functions be free from organizational and individual impairments that compromise objectivity.
Question 3: A government's 'fund balance' in a governmental fund represents:
- The difference between assets and liabilities measured on an accrual basis
- The difference between assets/deferred outflows and liabilities/deferred inflows (Correct answer)
- The total revenues minus expenditures for the current year only
- The cash balance available at year-end
Correct answer: The difference between assets/deferred outflows and liabilities/deferred inflows
Fund balance equals assets plus deferred outflows of resources minus liabilities minus deferred inflows of resources in governmental fund statements.
Question 4: A federal agency's 'obligation' under budget law is best defined as:
- Cash actually disbursed to a vendor
- A legally binding commitment that will require payment (Correct answer)
- An agency's request for additional appropriations
- Congressional approval of a spending plan
Correct answer: A legally binding commitment that will require payment
An obligation is a binding legal commitment — such as a signed contract — that will result in outlays immediately or in the future.
Question 5: Which approach to governmental performance measurement compares program outcomes to pre-established targets or benchmarks?
- Benchmarking analysis
- Cost-effectiveness analysis
- Program evaluation
- Results-based accountability (Correct answer)
Correct answer: Results-based accountability
Results-based accountability (RBA) focuses on measuring and reporting actual outcomes against predetermined performance targets.
Question 6: Under the Yellow Book (GAGAS), a performance audit must include which of the following?
- An opinion on the fairness of financial statements
- Criteria against which audit evidence is evaluated (Correct answer)
- A review of internal controls over financial reporting only
- A determination of criminal liability
Correct answer: Criteria against which audit evidence is evaluated
Performance audits under GAGAS require auditors to establish criteria — standards or measures — to evaluate whether program objectives are being met.
Question 7: Which federal financial management reform required agencies to integrate budget and performance information?
- Chief Financial Officers Act of 1990
- Government Performance and Results Modernization Act of 2010 (Correct answer)
- Federal Financial Management Improvement Act of 1996
- Antideficiency Act
Correct answer: Government Performance and Results Modernization Act of 2010
The GPRAMA of 2010 strengthened GPRA requirements and mandated integration of performance goals with budget submissions across federal agencies.
CGFM CGFM 5
Under GASB 68, state and local government employers must report their proportionate share of a cost-sharing pension plan's: