General compliance requirements are set forth in a. The Yellow Book b. The Singl

Question

General compliance requirements are set forth in a. The Yellow Book b. The Single Audit Act c. The compliance supplement to Circular A-133 d. The AICPA's generally accepted auditing standards 3· The risk that material noncompliance could occur assuming that no internal controls have been established to prevent it is referred to as a. Inherent risk b. Control risk c. Fraud risk d. Detection risk 4. Per OMB Circular A-133, the Schedule of Expenditures of Federal Awards a. Must be explicitly tested and reported on by the auditors b. Should serve to help auditors to determine the scope of their audit work but need not be explicitly tested c. Must be tested but need be reported on by the auditors only if the tests reveal material errors d. Must be explicitly tested and reported on by the auditors only if the total of federal awards is material relative to total expenditures Which of the following would not be reported on in the Schedule of Findings and Questioned a. Significant deficiencies in internal control b. Material noncompliance with provisions of laws, regulations, contracts, or grant agreements c. Material examples of inefficiency and ineffectiveness in carrying out federally funded programs d. Federally reimbursed expenditures that are not adequately documented 5. 6· The requirement for a report on compliance and internal control over financial reporting is set forth in the a. AICPA's Professional Standards b. GAO's Government Auditing Standards c. Single Audit Act d. OMB Circular A-133 The GAO standards pertaining to performance audits a. Mandate that programs be audited annually b. Mandate that programs be audited whenever information comes to the attention of the auditor indicating a need for a performance audit Mandate that a complete audit include both a financial audit and a performance audit e. d. Do not specify when and how often a program must be audited Performance audits differ from financial audits in that 8. The GAO's "general standards" do not apply to performance audits b. In conducting performance audits, the auditors do not necessarily attest to assertions of management e. The auditors need not issue a formal report setting forth their findings d. The main focus should be on activities that satisfy the criteria of Circular A-133 as "major programs" 9. Indiscermning the objectives of program to be audited,the auditors should give the greatest credibility to a. The legislation creating the program b. The organization's program budget c. The organization's mission statement and strategic plan d. Comments by the midlevel employees who actually implement the program

Explanation / Answer

Question Answer 2 C The compliance supplement to Circular A-133 3 A Inherint Risk 4 A Must be explicitly tested and reported on by the auditors 5 C Material examples of inefciency and ineffectiveness in carrying out federally funded programs 6 B The GAO's Government Auditing Standards 7 D Do not specify when and how often a program must be audited 8 B In conducting performance audits, the auditors do not necessarily attest to assertions of management 9 A The legislation creating the program Question Answer 5 C To perform any management functions for an audit client 6 A Must design their audit to provide reasonable assurance of detecting noncompliance with the terms of contracts or grant agreements 7 C All instances of fraud except those that are clearly inconsequential 8 B Contain sufcient information to document any departures from GAGAS 9 B Internal Control and Compliance 10 D Obtain and report the views of responsible ofcials concerning the ndings

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