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71 Cards in this Set
- Front
- Back
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What is the federal law that specifically required existing CFO agencies to have financial statements that successfully pass a financial audit? |
Government management reform Act of 1994 |
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What is the definition of a successful financial audit? |
Achieving an unmodified audit opinion |
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In which of the four waves of the FIAR process would a DoD entity expect to have an audible statement of budgetary resources to include its fund balance with treasury? |
Wave 2 |
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Government audits provide essential elements of public accountability and what? |
Control |
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Which standards generally apply to federal government audits? |
GAO standards or GAGAS |
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Who conducts, supervises, monitors and initiates audits and investigations relating to DOD programs and operations? |
Department of Defense inspector General |
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which is the DOD document that provides policy for DOD audit and internal review offices to use for conducting audits of DOD operations, systems, programs, and functions? |
DoDIG audit handbook |
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Auditors auditing with personal impairments violate which general standard? |
Independence |
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How many hours of continuing professional education must an auditor complete every two years? What is the minimum number of hours that must be completed in any year of the two-year period? |
80 hours in 2 years; 20 hours minimum each year |
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The auditor is restricted access to essential data necessary to satisfy the audit objective. What type of impairment would this be? |
External impairment |
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Which type of audits are expected to determine whether: financial information presented is in accordance with established or stated criteria; the entity has adhered to specific financial compliance requirements; and the entities internal control over financial reporting and/or safeguarding of assets is suitably designed and implemented to achieve the control objectives? |
Financial audit |
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Which types of audits are expected to determine whether the entity is acquiring, using, and protecting its resources economically and efficiently; programs are achieving the desired results or benefits; and the entity is accomplishing its mission in accordance with applicable laws, regulations, public policies? |
Performance audit |
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Which audit phase involves gathering evidence and determining materiality and significance of the findings? |
Review phase |
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During which audit phase would the auditor select the most important areas for audit coverage? |
Planning phase |
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What document includes the audit objectives, findings, and when appropriate recommendations? |
Audit report |
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What should be considered when evaluating the effectiveness of DOD audit organizations? |
Audit benefits |
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What is the name of the GAO standard that provides reasonable assurance that DOD auditors comply with applicable auditing standards and DOD audit policies? |
Quality control and assurance |
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Inspection of office security, separate and secure storage of records and equipment, and restricted system access are examples of what kind of controls? |
Internal controls |
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If auditors are deterred from acting objectively and exercising professional skepticism by pressures, actual or perceive, from management of the entity being audited, what would this be called? |
Threat to auditor Independence |
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Name the three main things implemented by the chief financial officers Act of 1990 |
1. Federal agencies may be audited 2. Established CFO positions for 24 Federal departments and agencies 3. The OMB deputy director for management oversees the audit process |
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Which act established a new governance structure for federal financial management (FM)and outlined a clear approach to improving day-to-day Federal FM, supporting better decision making, and enhancing accountability? |
CFO Act of 1990 |
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Which act required the 24 federal agencies with CFOs to have audited financial statements? |
The government management reform act (GMRA) of 1994 |
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Which act added more specific financial system, financial management standardization, and internal control standard requirements? |
Federal Financial Management improvement Act of 1996 (FFMIA) |
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Name the biggest lasting impact of the CFO Act and the follow-on cited laws that transformed Federal Financial Management |
Changed from a "backroom" function, out of side and out of mind, to a "boardroom" function, a key component of planning and decision-making at the executive level |
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True or false: the Department of Defense is the largest and most complex organization in the world |
True |
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The strategic, long-term plan devised by DOD to produce audible financial statements as known as what program? |
Financial improvement and audit remediation (FIAR) program |
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What is the primary purpose of a financial statement audit? |
To attain an unmodified opinion |
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Name the two priorities the USD comptroller has required in order to achieve successful audit |
Improving budgetary information Mission critical asset information |
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Name the four waves in the FIAR strategy |
Wave 1: appropriations received audit Wave 2: statement of budgetary resources Wave 3: mission critical asset existence and completeness audit Wave 4: full financial statements audit |
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What was a significant requirement for DoD agencies to establish in order to achieve audit readiness? |
Establish a beginning date (This will be used as the start date the audit will begin from) |
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The GAO standards, government auditing standards are referred to as what? |
Generally accepted government auditing standards (GAGAS) or the yellow book |
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GAGAS must be followed by whom? |
- GAO - Inspectors General - Federal auditors (Army, Navy, etc) - military internal review groups - non-federal auditors when auditing federal entities |
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Name the four general standards that apply to all audits and attestation engagements |
Auditor Independence Auditor professional judgement Auditor competence Quality control and assurance |
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Independence of mind and Independence of appearance refer to which of the four general standards that apply to all audits? |
Auditor Independence |
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What is the difference between an auditors Independence of mind and appearance? |
Independence of mind means they'll give professional judgment with integrity. Independence in appearance refers to the perception of impartiality |
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Name three key actions an auditor with professional judgement should do |
- SMA: carefully define the scope of work, methodology for gathering info, and amount of evidence - exercise professional skepticism - obtain reasonable, not absolute, assurance from the entity |
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Thoroughly training an auditor and achieving 80 hours of continuing education is aligned with auditor judgment or auditor competence? |
Auditor competence |
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When an auditor is completing their 80 hours of CPE every two years, what is the minimum number of hours to be completed in one year? |
20 hours |
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How many CPE hours must be related to government auditing, the government environment or they specific and unique environment in which the audited entity operates? |
At least 24 hours |
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What are the two components associated with audit quality control and assurance? |
1. Establish a system to provide reasonable assurance 2. External review at least once every 3 years |
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Who does the Department of Defense Inspector General report to? |
Secretary of Defense |
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Which act requires that federal inspectors general comply with the controller general standards for audits? |
Inspector General Act of 1978 |
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During a DOD audit, who is responsible for conducting, supervising, monitoring and initiating audits and investigations related to DOD programs and operations? |
DoD Inspector General |
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DOD's audit handbook supplements policy guidance contain in what auditing standards? |
GAO yellow book (GAGAS) |
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Who is the head of GAO? |
Controller general |
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How many years is the comptroller general appointment? |
15 years |
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What are the four main audit groups within Department of Defense? |
- DoD office of Inspector General - Army audit agency - Air Force audit agency - Naval audit service |
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DoD internal audits try to minimize waste, mismanagement, fraud and what? |
Abuse |
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Which law provides enhanced performance planning, management, and reporting tools that can help inform congressional and executive branch decision making to address significant challenges facing our nation |
The GPRA Modernization Act of 2010 (GPRAMA) (Public Law 111-352) |
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Which law requires agencies to engage in performance management tasks such as setting goals, measuring results, and reporting their progress. |
The government performance and results act (GPRA) of 1993 |
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Which act requires the treasury to annually prepare and submit to the president and Congress and audited financial statement for the preceding fiscal year? |
Government management reform Act of 1994 |
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What is the name of the agency that conducts all necessary contract audits within the DOD? |
Defense contract audit agency (DCAA) |
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Who has direct oversight over DCAA? |
USD comptroller |
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What percent of all audits are financial audits, performance audits, and attestation engagements? |
Financial: 20% Performance: 70% Attestation: 10% |
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What are some not-audit services an auditor may perform? |
- develop methods in approaches in evaluating a new program - forecast potential program outcomes - perform investigative work |
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What are the two broad principles governing non-audit services found in the GAO yellow Book? |
- Cannot perform management functions or make management decisions - audit organizations cannot audit their own work or advise in situations that could impair the auditor's independence |
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What are the three phases of a governmental audit? |
Plan, review, report |
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What are the 3 main tasks that happen during the planning phase of a governmental audit? |
- objective, scope, methodology are defined - determine effectiveness of internal controls - evaluate the agency's corrective actions address findings from prior audits |
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What advantage does statistical sampling provide an auditor during the planning phase? |
Enabling the auditor to project sample audit results to the universe of transaction sample |
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True or false: audit results from judgmental sampling apply only to those items sampled |
True |
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What should an auditor do if they suspect illegal activity or fraud? |
Immediately stop the audit and turn over to third party |
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What 3 main tasks happen during the review phase of a governmental audit? |
- begins by gathering evidence that is sufficient (quantity) and appropriate (quality) - auditor may test management's procedures to obtain assurance of information gathered - evidence gathered is formerly documented in "working papers" |
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For each type of audit, list whether it requires sufficient, appropriate or both kinds of evidence during the audit review phase |
Financial: both Performance: both Attestations: sufficient only |
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Relevance, validity, and reliability refer to what type of evidence during the audit review phase? |
Appropriateness / quality |
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For financial statement audits, what are the four components involved in the audit report? |
- whether in accordance with GAAP - inconsistencies with last year - disclosures are reasonably adequate - statement of opinion |
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What are the four types of opinions found in an audit report from best to worst? |
- unmodified (best) - modified (exception) - disclaimer (unable to render opinion) - adverse (material misstatement of fact and failure to follow GAAP) |
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What are the four components of a performance audit report? |
- retrievable, suitable form - includes objectives, scope, methodology, findings (in compliance with yellow book) - distribution - quality elements |
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What are the two potential benefits of an audit report? |
Monetary and non-monetary benefits |
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What is the difference between a monetary and non-monetary benefit of an audit report? |
Monetary: benefits expressed in financial terms. AKA "funds put to better use" or "questioned cost" Non-monetary: valuable benefits to the government not expressed in monetary terms. Such as operational readiness, personnel safety, data accuracy |
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During a governmental audit, who is responsible for verifying the monetary and non-monetary benefits? |
The auditor |
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Which potential benefit from an audit report is confined to the POM process? |
Monetary benefits. (If monetary benefits from recent audit are not shown in budget/POM, it's an easy congressional mark) |
