Ex. 15-1 Select the best answer.

1. Government Auditing Standards must be adhered to in all financial audits of

a. State and local governments b. Federal agencies c. Federally chartered banks d. All of the above

2. Generally accepted government auditing standards (GAGAS) refers to standards incorporated in

a. The Yellow Book b. The Yellow Book and OMB Circular A133 c. The Yellow Book and the AICPA's Professional Standards d. The Yellow Book, OMB Circular A133, and the AICPA's Professional Standards

3. Government Auditing Standards characterizes government engagements into which of the following three categories?

a. Financial audits, compliance audits, and performance audits b. Financial audits, operational audits, and performance audits c. Financial audits, attest engagements, and performance audits d. Financial audits, efficiency and effectiveness audits, and compliance audits

4. The Yellow Book's general standards apply

a. Only to financial audits b. Only to financial audits and other attest engagements c. To performance engagements as well as to the financial audits and attest engagements d. To all professional engagements relating to accounting

5. Which of the following is least likely to impair the independence of a county auditor

a. He is appointed by the county manager and reports to the manager b. His responsibilities include preparing the county's CAFR c. He is elected by the citizenry d. He receives an annual bonus only in years in which the county has a surplus, not a deficit

6. Per the GAO standards, auditors

a. Must design their audit to provide reasonable assurance of detecting noncompliance with the terms of contracts or grant agreements b. Are not responsible for detecting noncompliance with the terms of contracts or grant agreements but must report such noncompliance if they become aware of it c. Must design their audit so that it is more likely than not they will detect noncompliance with terms of contracts or grant agreements d. Are responsible for detecting noncompliance with the terms of contracts or grant agreements only insofar as such noncompliance will have a material impact on the financial statements

7. The GAO's Green Book deals with

a. Environmental issues b. Federal investment policies c. Internal controls d. Waste, fraud, and abuse

8. Per the GAO standards, an auditor's report

a. Must disclose instances of material inefficiencies b. Need not be made public if it contains information that would be harmful to national security c. Must be retained by the auditor for a period no less than ten years d. Must explicitly indicate that the individual auditors on the engagement have satisfied the standards CPE requirements.

9. The GAO reporting standards differ from those of the AICPA in that the GAO standards require the auditors to explicitly comment on their testing of

a. Financial transactions b. Compliance c. Efficiency and effectiveness d. Governmentwide statements

10. An auditor has completed a draft of her report on a performance audit, which in several respects is critical of the program under review. The auditor should

a. Refrain from discussing the findings with management until the final report is issued and made public b. Notify the federal agency that funded the program of the audit's findings c. Allow responsible officials to review the report, but only as a courtesy, not to suggest any changes d. Obtain and include in the final report the views of responsible officials concerning the findings