GAC Client Advisory Services 2

Question 1

A government client asks their advisor to help develop a long-term financial forecast. Which time horizon is most commonly recommended for governmental long-range financial planning?

Accepted Answer

3 to 5 years

Answer

A 3-to-5-year horizon is the standard for governmental long-range financial planning, balancing reliability with strategic foresight.

Question 2

When advising a governmental client on internal controls, which framework is most widely recognized for evaluating control effectiveness in the public sector?

Accepted Answer

COSO Internal Control Framework

Answer

The COSO Internal Control — Integrated Framework is the most widely recognized standard for evaluating internal controls in governmental entities.

Question 3

A client advisory engagement for a municipality reveals that revenue estimates in the budget consistently exceed actual collections by 15%. What advisory recommendation is most appropriate?

Accepted Answer

Apply a conservative revenue adjustment factor to future estimates

Answer

Applying a conservative adjustment factor corrects systematic over-estimation and improves budget reliability.

Question 4

Under GASB standards, which basis of accounting do governmental funds use for advisory purposes when assessing short-term fiscal health?

Accepted Answer

Modified accrual basis

Answer

Governmental funds use the modified accrual basis, recognizing revenues when measurable and available and expenditures when the liability is incurred.

Question 5

A county advisor is reviewing pension obligations. Under GASB 68, where must the net pension liability be reported?

Accepted Answer

In the government-wide statement of net position

Answer

GASB 68 requires the net pension liability to be reported on the government-wide statement of net position.

(GAC) Governmental Accounting Certification Practice Test

(GAC) Governmental Accounting Certification Practice Test

GAC Client Advisory Services 2