GAC Auditing Principles & Procedures 2

Question 1

Under GAGAS, which type of audit opinion is issued when the auditor cannot obtain sufficient appropriate evidence?

Accepted Answer

Disclaimer of opinion

Answer

A disclaimer of opinion is issued when the auditor is unable to obtain sufficient appropriate evidence to form an opinion on the financial statements.

Question 2

Which GASB standard governs the financial reporting of state and local governments and is foundational to governmental audits?

Accepted Answer

GASB Statement No. 34

Answer

GASB Statement No. 34 established the current model for state and local government financial reporting, including government-wide and fund financial statements.

Question 3

During a performance audit, an auditor identifies a condition that deviates from a criterion. What must the auditor next determine?

Accepted Answer

The cause of the deviation

Answer

After identifying a condition, the auditor must determine the cause to fully develop a finding under the condition-criteria-cause-effect framework.

Question 4

An auditor discovers that a government agency failed to deposit tax collections within the required timeframe. This finding relates to which audit objective?

Accepted Answer

Compliance

Answer

Failure to follow required deposit timelines is a noncompliance finding because it violates a legal or regulatory requirement.

Question 5

What is the primary purpose of obtaining a management representation letter during a governmental audit?

Accepted Answer

To confirm oral representations made by management in writing

Answer

A management representation letter formalizes in writing the significant oral representations made by management, providing documented evidence of those assertions.

(GAC) Governmental Accounting Certification Practice Test

(GAC) Governmental Accounting Certification Practice Test

GAC Auditing Principles & Procedures 2