CPA Auditing and Attestation (AUD) : Compliance, & Government Audits
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Example Questions
Example Question #11 : Compliance, & Government Audits
Each of the following types of controls is considered to be an entity-level control, except those:
Relating to the control environment
Pertaining to the company's risk assessment process
Addressing policies over significant risk management policies
Regarding the company's annual shareholder meeting
Regarding the company's annual shareholder meeting
Entity level controls include controls related to the control environment, the risk assessment process, and the policies over risk management policies. Controls regarding the company's annual shareholder meeting are controls related to a specific event rather than the entity as a whole.
Example Question #5 : Types Of Engagements Integrated Audits
Internal control over financial reporting consists of which component?
Monitoring
Existing control activities
All of these components
Risk assessment
All of these components
The components not listed would include Information and communication and control environment. These 5 components make up ICFR.
Example Question #12 : Compliance, & Government Audits
Government Accounting Standards
Require a written report on internal control
All of the answer choices are correct
May require a duty to report fraud
Require a written report on compliance with applicable laws and regulations
All of the answer choices are correct
Under GASB standards the auditor is required to report on internal control. The written report is also required to establish compliance with applicable laws and regulations and may require a duty to report fraud.
Example Question #13 : Compliance, & Government Audits
The Single Audit Act of 1984
Requires one audit firm direct the audits of a state or local government agencies
Applies to Federal funding over $750,000
Applies to State funding over $750,000
Requires on government audit per year
Applies to Federal funding over $750,000
The single audit act of 1984 requires audits of federal funds received over a threshold of $750,000.
Example Question #14 : Compliance, & Government Audits
Governmental audits fall under standards developed by:
GAGAS
AICPA
PCAOB
None of the answer choices are correct
GAGAS
Governmental auditing standards are developed by the General Accounting Office who publishes Generally Accepted Governmental Audit Standards.
Example Question #15 : Compliance, & Government Audits
When auditing the financial statements of a governmental entity, the auditor is required to report on A) Noteworthy accomplishments of the program B) The scope of the auditor's testing of internal controls
A
Neither
B
Both
B
When auditing the financial statements of a governmental entity in accordance with GAS, the auditor is required to report on the scope of the auditor's testing of internal control but not on noteworthy accomplishments.
Example Question #16 : Compliance, & Government Audits
An enterprise engaged a CPA to audit its financial statements in accordance with GAS because of the provisions of government grant funding agreements. Under these circumstances, the CPA is required to report on the enterprise's internal controls either in the report on the financial statements or in:
The report on the performance audit
A separate report
The notes to the financial statements
A letter to the government funding agency
A separate report
The report on the audit of the financial statements should describe the scope of the auditor's testing of compliance with laws and regulations and internal control over financial reporting and should either present the results of those tests or refer to a separate report containing that info.
Example Question #17 : Compliance, & Government Audits
One of the most notable attributes of governmental audits is that ______.
They demand the highest level of assurance
They are the most difficult type of audit
A written report on internal control must be prepared
They ensure absolute assurance
A written report on internal control must be prepared
This point about governmental audits is heavily tested and the other options are not true about governmental audits.
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