CGFO Internal Controls 5

Question 1

A government finance officer is reviewing the results of a fraud risk assessment. Which factor would MOST increase the risk of asset misappropriation?

Accepted Answer

High employee turnover in the accounts payable department

Answer

High turnover in sensitive financial positions reduces institutional knowledge, weakens oversight, and creates opportunities for fraud.

Question 2

The three elements of the 'fraud triangle' that internal controls are designed to address include opportunity, rationalization, and:

Accepted Answer

Pressure

Answer

The fraud triangle consists of pressure (incentive), opportunity, and rationalization; controls primarily address opportunity.

Question 3

Which statement about internal control limitations is most accurate?

Accepted Answer

Internal controls can be overridden by management collusion

Answer

Even well-designed controls cannot prevent fraud when management colludes to circumvent them, which is a fundamental limitation.

Question 4

A government's petty cash fund is subject to surprise counts by the supervisor. This control is best classified as:

Accepted Answer

Detective and manual

Answer

A surprise count identifies discrepancies after they have occurred (detective) and is performed by a person (manual).

Question 5

Under the Single Audit Act, a government that expends $750,000 or more in federal awards must:

Accepted Answer

Undergo a single audit covering federal award expenditures

Answer

The Single Audit Act threshold of $750,000 triggers a requirement for a single audit that covers both financial statements and federal compliance.

(CGFO) Certified Government Finance Officer Practice Test

(CGFO) Certified Government Finance Officer Practice Test

CGFO Internal Controls 5