CGFO Auditing Standards 3

Question 1

Under the Single Audit Act, a 'major program' determination is based on:

Accepted Answer

A risk-based approach considering expenditure thresholds and risk factors

Answer

OMB's Uniform Guidance prescribes a risk-based approach combining expenditure thresholds and Type A/B program risk assessments to identify major programs.

Question 2

What is the threshold for a 'low-risk auditee' designation under the Uniform Guidance Single Audit?

Accepted Answer

Clean audits for 2 of the past 3 years with no material weaknesses

Answer

A low-risk auditee must have had unmodified opinions, no material weaknesses, and no Type A programs with high risk for at least 2 of the preceding 3 years.

Question 3

In a government audit, 'control risk' is best defined as:

Accepted Answer

The risk that internal controls will fail to prevent or detect material misstatements

Answer

Control risk is the probability that an entity's internal controls will not prevent or detect a material misstatement on a timely basis.

Question 4

Which report is NOT typically required in a Single Audit?

Accepted Answer

Report on the entity's investment portfolio valuation

Answer

Single Audit requires reports on financial statements, internal controls, compliance with major programs, and a schedule of federal expenditures, but not investment portfolio valuation.

Question 5

The Government Accountability Office (GAO) issues Yellow Book standards applicable to:

Accepted Answer

Federal, state, local, and non-profit entities receiving federal funds

Answer

GAGAS applies broadly to audits of government entities and entities that receive government awards at all levels, as well as non-profit recipients of federal funding.

(CGFO) Certified Government Finance Officer Practice Test

(CGFO) Certified Government Finance Officer Practice Test

CGFO Auditing Standards 3