CGFO Fin Rpt

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CGFO Fin Rpt
2013-11-12 19:26:58
CGFO Financial Reporting

CGFO Exam for Financial Reporting
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  1. Who is primarily responsible for the adequacy of a government's framework of internal control?
  2. There are 2 key advantages to the use of control cycles for purposes of evaluating control related policies and procedures
    The use of control cycles promotes efficiency

    The use of control improves the effectiveness of the evaluation process
  3. What is the purpose of documenting how events and transactions are processed in a control assessment?
    To identify potential risks and weaknesses as well as compensating controls
  4. Any sound control-related policy or procedure will both prevent and detect error and irregularities.  True or False
  5. Which of the following is a key consideration in a vulnerability assessment?
    Inherent risk
  6. Which of the following is an example of an inherent limitation in the effectiveness of internal control?
    • Cost/benefit consideration
    • Potential for management override of controls
    • Risk of collusion

    All the above are inherent limitations
  7. What are the basic sections of a CAFR?
    • Introductory
    • Financial
    • Statistical
  8. At a minimum, to whom should the letter of transmittal be addressed
  9. What is the earliest possible date that may be used for the letter of transmittal?
    Date of the independent auditor's report
  10. How many years of trend data typically must be presented in the statistical section of a CAFR?
    10 years
  11. The first step in evaluating the adequacy of control related policies and procedures is to evaluate the effectiveness of their design; True or False.
  12. What would be provided or addressed in the letter of transmittal rather than in MD&A?
    Prospects for the local economy
  13. Which of the following best describes the location of MD&A within the CAFR?
    Located immediately preceding the financial statements
  14. What is not a recommended element of the letter of transmittal?
    Summary financial data
  15. Name the elements of the letter of transmittal?
    • Profile of the govt
    • Information usefull in assessing economic conditions
    • Award and acknowledgments
  16. Name 3 conditions generally present when fraud occurs
    • Incentive/pressure
    • Opportunity
    • Attitude/rationalization
  17. Which of the following statements is true concerning the role of the budget in the public sector?

    A)It is a means of setting public policy

    B)It is a way for the legislative branch to exercise control over the executive branch

    C)It is a financial planning tool
    All the above statements are true
  18. What is the expenditure threshold for Single Audits?
  19. When does GAAP required that fund balance be reserved for encumbrances?
    Whenever a lapse period is used for encumbrances

    Whenever encumbrances lapse and are automatically reappropriated

    Both the above are correct
  20. What is the point of reference for the opinion offered in the independent auditor's report?
    The financial statements taken as a whole
  21. Which of the following statements is true concerning the role of the budget in the public sector?

    A)It is a means of setting public policy

    B)It is a way for the legislative branch to exercise control over the executive branch

    C)It is a financial planning tool
    All are correct
  22. How often is the CAFR issued?
  23. Which of the following statements is True concerning the schedule of funding progress for pension plans and other OPED plans that use the aggregate actuarial cost allocation method for funding purposes

    Required for OPED plans, but not pension plans
  24. In what situation are restricted assets most commonly encountered in the public sector
    Revenue bonds
  25. What does the GFOA recommend as the minimum capitalization threshold for financial reporting?
  26. Which best describe the appropriate application of a govt capitalization threshold to groups of smaller items?
    The capitalization threshold normally should be applied to groups of items rather than to individual items
  27. Which of the following standards is relevant to Single Audits?
    Office of Management and Budget circular A-133
  28. What is the minimum number of paragraphs in any independent auditor's report on the fair presentation of financial statements?
  29. Which of the following best describes the independent auditor's responsibility for required supplementary information (RSI)?
    The auditor must perform certain limited procedures
  30. Name the auditor's reports typically would contain an opinion?
    Report on the fair presentation of the financial statements

    Report on internal controls and compliance over financial reporting

    Report on compliance and internal controls over compliance applicable to each major federal award program

    All the above contain an opinion
  31. What is in the Introductory Section?
    • Letter of Transmittal
    • GFOA award
    • Organizational chart
    • Elected Officials
  32. What makes up the Fin Section of CAFR?
    • Auditor Report (Opinion)
    • MD & A
    • Basic F/S
    •   Government Wide
    •   Fund F/S
    •   Notes to F/S
    • RSI required supplementary information
  33. What is RSI and what is required to be presented here?
    Required Supplementary Information

    • Pensions
    • OPEB
  34. What is SSAP?
    Summary of Significant Accounting Policies

    Acctg Prin & methods peculiar to government
  35. What is a control deficiency?
    Control deficiency exists when the design or operation of a control does not allow mgmt or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis.
  36. What is a Significant Deficiency?
    A significant deficiency is a deficiency, or combination of deficiencies in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
  37. What is Material Weakness?
    A material weakness is a deficiency, or combination of significant deficiencies in internal control that result in more than a remote likelihood; such that there is a reasonable possibility; that a material misstatement of the entity's f/s will not be prevented or detected and corrected on a timely basis.
  38. How many fund balance classifications are there; name them?
    • 5
    • Nonspendable
    • Restricted
    • Committed
    • Assigned
    • Unassigned
  39. Define the 5 classifications of fund balance
    • 1.  Nonspendable - amounts that cannot be spend because that are not spendable form, or legally or contractually required to be maintained in intact; items not expected to be converted to cash such as inventory.
    • 2.  Restricted - when constraints place on the use of resources are either externally imposed by creditors (bond covenants), grantors, laws or regulations.
    • 3.  Committed - includes amounts that can be used only for the specific purposes imposed by formal action (ordinance).  May be redeployed.
    • 4. Assigned - used for specific purposes, but do not meet the criteria to be classified as restricted or committed.  Intended uses by established council.
    • 5.  Unassigned - residual classification for general fund and includes all spendable amounts not contained in other classifications.
  40. What is a discretely Presented Component Unit?
    Is an entity which is legally separate from main government,  but is financially accountable to the government and whose relationship with government is such that exclusion would cause f/s to be misleading or incomplete.
  41. What 2 F/S are included with the Government-wide F/S?
    • Statement of Net Assets
    • Statement of Activities
  42. Government wide F/S are presented how?
    Economic resources measurement focus, and the accrual basis of accounting.
  43. Under modified accrual basis of accounting when are revenues recorded?
    When they become both measurable and available to finance expenditures of the current period.
  44. Under modified accrual basis of accounting what does available mean?
    Available means collectible within the current period, or soon enough thereafter, to be sued to pay liabilities of the current period, within 60 days of the end of the fiscal year, expect grant revenues within 12 months, and jointly assessed taxes collected through other governments, are within 90 days.
  45. Government-wide Stmt of Activities reports how?
    By functional categories of programs and demonstrate how and what degree those programs are supported by specific revenues.
  46. Government-wide Stmt of Activities reports program revenues by what 3 categories?
    Charges for services - Direct recovery from customers for services rendered.

    Operating grants and contributions

    Capital grants and contributions
  47. True or False?

    A control deficiency remote likelihood a material non compliance will not be detected
    False, material weakness
  48. You have how many days to rebut audit findings?
    30 days
  49. GAGAS reports to who?
    GAGAS reports to Government Accountability Office (GAO)
  50. Difference between Current & Advance refunding?
    Current within 60 days - old debt is issue is callable & retired with proceeds of new debt.

    Advance after 60 days - old debt is not yet callable; new debt proceeds are held in trust
  51. True or False Is MDA part of fin section?
  52. OPEB is reported where on F/S?
    RSI liability???
  53. AICPA reports to who?
  54. Does Legislative Audit Committee audit Florida virtual school?
  55. AG has how many months to complete audit
    9 months
  56. Auditor independent can't do what?  Write MDA?????
    Can't perform management's functions such as write MDA (Management Discuss & Analysis).
  57. What is the date of letter of transmittal?
    Same as audit date
  58. True or False is the Statistical Section required?
  59. How are land proceeds recorded?
    As operating revenue wrong????
  60. When does a joint venture exist?
    interest, joint assets, contract all???
  61. What is presented for the FL Single Audit?
  62. GAAS has how many standards & name them?
    • Generally Accepted Auditing Standards are 10
    • 3 General Standards
    • 3 Field Work Standards
    • 4 Reporting Standards
  63. Which of the following types of fraud is least likely in an environment where cash receipting and record keeping for accounts receivable are adequately segregated?
    A.  Lapping
    B.  False Claims
    C.  Charge-off fraud
    D.  Pilfering
    A. Lapping
    (this multiple choice question has been scrambled)
  64. What is the best way to select a sample to test internal controls?
    Random sampling
  65. There are two aspects to sampling risk when performing tests of controls:
            • The risk of assessing control risk too low represents the risk that an audit sample supports the conclusion that the design and operation of an internal control is effective when in fact it is not.
            • The risk of assessing control risk too high represents the risk that an audit sample supports the conclusion that the design and operation of an internal control is not effective when in fact it is effective.
  66. Five methods are commonly used to select population items for audit testing:
                • Random Sampling involves selecting items from the population so that each item has an equal chance of being selected. Random selection requires the use of random number tables or computer programs to guarantee that each population item has an equal chance of selection.
                • Systematic Sampling involves selecting every kth item from the population after a random start.
                • Haphazard Sampling involves selecting items from the population without consideration to known characteristics of the items in the population (i.e. any conscious bias in the selection of population items).
                • Block Sampling involves selecting items from the population in contiguous groups (or blocks).
                • Purposive or Directed Sampling involves selecting items from the population using some prespecified criteria (i.e., selecting accounts receivable for confirmation based on the size of the outstanding balance).
  67. All of the following are examples of inherent risk except:

    Cash receipts
    Prior problems
  68. Which is not an example of a control procedure?

    Segregation of incompatible duties
    Analytical review
    Mandatory holidays
    Mandatory Holidays
  69. What is a criteria for blending a component unit?
    Shared governing board & a financial benefit or burden relationship
  70. The paramount objective of general purpose external financial report is:
  71. Which of the following has the highest authoritative status?
    A. GASB Concept Stmt
    B. AICPA Audit & Acctg Guide
    C. GASB Technical Bulletin
    D. GASB Interpretation
    D.  GASB interpretation
    (this multiple choice question has been scrambled)
  72. In a general fund, unassigned fund balance is a measure of:
    A.  Appropriable resources
    B.  cumulative earnings
    C.  available cash
    D.  economic position
    A.  Appropriable resources
    (this multiple choice question has been scrambled)
  73. Which type of fund does NOT have a measurement focus?
  74. Which of the following is a required F/S for a governmental fund?
    Balance Sheet
  75. Data from which fund type is NOT included in the government-wide statements.
    Agency/fiduciary funds (OPM).
  76. In the statement of activities, which of the following is always classified as general revenue?
  77. Which fund would report a statement of cash flows?
  78. GFOA recommends that general-purpose governments maintain unrestricted fund balance for the general fund at no less than?
    Two months of general fund revenues or expenditures.
  79. "Yellow Book" is often used to describe the auditing standards issued by who?
    Government Accountability Office
  80. GFOA recommends that audit contracts should be for a minimum of how many years?
    5 years
  81. What does an audit opinion cover?
    Whether the financial statements are presented fairly and conformity to GAAP.
  82. The main goal of the annual audit of the financial statements is to?
    Assure the F/S are free of material misstatements.
  83. Who should serve on an audit committee?
    Members from the governing board
  84. What is CFDA number?
    Catalog of Federal Domestic Assistance
  85. What is CSFA number?
    Catalog of State Financial Assistance
  86. What does ARRA mean?

    How is it reported?
    American Recovery & Re-Investment Act (Federal Grant)

    Must be reported quarterly
  87. Name 3 types of audits
    • Financial
    • Operational
    • Performance
  88. What is FAF?
    Financial Accounting Foundation
  89. Define fund accounting:
    An accounting system whose emphasizing accountability rather than profitability.
  90. What are the financial reporting characteristics? Objectives?

    • Consistent
    • Comparable
    • Reliable
    • Relevant
    • Timely
    • Understandable
  91. What does GAAS mean?
    Generally Accepted Auditing Standards
  92. What does GAGAS mean?
    Generally Accepted Government Auditing Standards.
  93. What are the documents GASB uses to set standards?

    • Discussion memo
    • Invitation to comment
    • Preliminary views
    • Exposure drafts
  94. How funds must a government have?
    One, general fund only required fund.

    Use only minimum number necessary for management and accountability
  95. Internal Control consists of 5 components; name them.
    • Control environment
    • Risk assessment
    • Control activities
    • Information & Communication
    • Monitoring
  96. What is COSO?
    Committee of Sponsoring Organization.  Joint initiative of 5 private sector organizations and dedicated to providing leadership on enterprise risk mgmt, internal control and fraud deterrence.
  97. Name the 4 types of Budgets

    • Cash
    • Capital
    • Operating
    • Project
  98. Name the Fund Categories
    • 11 Fund categories
    • Gov't Funds
    •  GF
    •  Sp Rev
    •  Debt Svc
    •  Capital Proj
    •  Permanent

    • Proprietary Funds
    •  Enterprise
    •  Internal Service

    • Fiduciary
    •  Pension
    •  Investment
    •  Private Purpose
    •  Agency
  99. What are the 3 Broad Classifications of Funds?
    • Governmental
    • Proprietary
    • Fiduciary
  100. 218.503 Financial emergency is determined how? (4)
    • 1. Failure to pay within same fiscal yr. in which due to pay s-t loans or failure to make bond Debt svc or other l-t debt pymts due, as a result of lack of funds.
    • 2. Failure to pay uncontested claims from creditors within 90 days after the claim is presented, as a result of lack of funds.
    • 3. Failure to transfer at the appropriate time, due to lack of funds:  Taxes withheld, employer or employee contributions for; or Federal social security; or any pension, retirement, or benefit plan of an employee.
    • 4. Failure for one pay period to pay, due to lack of funds: Wages & Salaries; or retirement benefits.
  101. 218.503 Financial emergency who does a local gov't notify?
    The Governor & the Legislative Auditing Committee.
  102. 218.503 Financial emergency who does a district school board notify?
    • The Commissioner of Education and
    • Legislative Auditing Committee.
  103. Name some of the 218.503 Financial emergency measures to resolve problem.
    • 1.  Approve lcoal gov't entity's budget
    • 2.  Authorizing a state loan to local gov't
    • 3.  Prohibit local gov't from issuing any form of debt.
    • 4.  Make inspections of records, reports, & assets.
    • 5.  Consulting to correct problems.
    • 6.  Provide technical assistance.
    • 7.  Establish a fin emergency board to oversee activities of local gov't.
  104. Name GAAS General Standards.
    • 3 AID
    • *Adequate technical training & proficiency as auditor
    • *Independence in mental attitude
    • *Due Professional Care
  105. Name GAAS Field Standards.
    • ASS
    • *Adequate planning & proper supervision
    • *Study & evaluation of internal control
    • *Sufficient competent evidential matter basis of opinion
  106. Name GAAS Reporting Standards.
    • SEGI
    • *State if fin stmts presented in accordance with GAAP
    • *Expression of opinion or reason why not
    • *GAAP consistently observed in current & preceding periond
    • *Informative disclosure reasonably adequate
  107. List in order Auditor's Standard Report.
    • OSOE
    • Opening - identifies FS being audited
    • Scope - Describes nature of the audit
    • Opinion - Expresses auditors opinion re: fairness of FS
    • Explanatory - used in most gov't audits, usually related to auditors role in reviewing supplementary information
  108. Name the 4 types of auditors opinions
    • UQAD
    • Unqualified - FS presented fairly
    • Qualified - material departure from GAAP
    • Adverse - FS do no present fairly in conformity with GAAP
    • Disclaimer -  Often due to inability to examine records
  109. GAGAS reports to who?
    Generally Accepted Gov't Auditing Standards reports to GAO (Gov't Accountability Office)
  110. Number of members of the Legislative Audit Committee (LAC)
    10 members 2 year term

    5 members from the Senate - appointed by President of the Senate

    5 members from the House of Representatives - appointed by the Speaker of the House
  111. How often does Auditor General audit types of Gov'ts?

    Public Universities
    School of the Blind & Deaf
    Operational audits of state agencies
    Performance audits of Dept of Revenue
    Public Universities - annually

    School of the Blind & Deaf - annually

    Operational audits of state agencies - Every 2 years

    Performance audits of Dept of Revenue - Every 3 years
  112. Who signs Letter of Transmittal?
    CFO or COO
  113. What is required for CAFR but not GAAP?
    • CAFR Non GAAP:
    • *Supplemental Information
    • *Statistical Information (10 years)
    • *Introduction:
    •     *Letter of Transmittal
    •     *Profile
    •     *Previous GFOA Award

    • GAAP:
    • *Financial Section (MDA, Basic FS w/notes)
    • *RSI
  114. What is required Statistical Section?
    • Fin trends info
    • Rev capacity
    • Debt capacity
    • Demographic & economic info
    • Operating info