True False Cognizant Agency

1.      A “cognizant agency” can be an employee of either a federal agency or an independent accounting firm.

TRUE

FALSE

2.      The Single Audit Act of 1984 was passed to eliminate the costly practice of requiring separate audits for each federal program in which an organization participated

TRUE

FALSE

3.      Performance audits are sometimes referred to as “operational” audits.

TRUE

FALSE

4.      Performance audits must be conducted by independent auditors. 

TRUE

FALSE

5.      To “attest” means to confirm that something is true, correct, or genuine.

TRUE

FALSE

6.      An auditor of any government or not-for-profit that receives federal monies must include a report on the entity’s internal control structure within their audit report or provide a cross-reference to that report. 

TRUE

FALSE

7.      The AICPA originally established auditing standards for federal single audits

TRUE

FALSE

8.      Newly installed computer programs are one indicator that a government’s participation in a federal program may be at high risk of noncompliance.

TRUE

FALSE

9.      GAO independence guidelines permit CPA firms to determine the estimated useful lives of their clients’ assets. 

TRUE

FALSE

10.  Under GAO (GAGAS) standards, independent auditors must report all instances of fraud or illegal acts that they discover during the course of an audit. 

TRUE

FALSE

11.  Regarding the single audit process, required supplemental information is considered to be within the scope of the audit.

TRUE

FALSE

12.  Per OMB Circular A-133, “questioned costs” are those that should not be reimbursed under a federal grant because they are in violation of laws of provisions pertaining to the grant.

TRUE

FALSE

13.  The Yellow Book is an informal term for the compendium of all AICPA audit standards.

TRUE

FALSE

14.  An audit of a government or not-for-profit under the Single Audit Act has two main components: an audit of the financial statements under general accepted auditing standards (GAAS) and an audit of federal financial awards. 

TRUE

FALSE

15.  An attestation engagement might include examination of prospective or pro-forma financial statements. 

TRUE

FALSE