Governmental Accounting Office (GAO)

Question 1

According to GAGAS what are their 4 Independence and Ethical Principles?

Answer 1

1 Independence
2 Public Interest (ethical)/Competence?
3 Integrity
4 Objectivity

Question 2

According to GAGAS what are their 2 guidelines to the Independence and Ethical Principles?

Answer 2

1 Government info used only for official use not for personal use
2 Professional behavior

Question 3

For governmental entities there are 4 key independence requirements and auditor should consider?

Answer 3

1 Use conceptual framework
2 Guidance when located within the entities they audit
3 Guidance for performing non audit services
4 Document auditors independence

Question 4

What are the 7 threats to independency in governmental entities?

Answer 4

1 Self-interest threat
2 Self-review threat
3 Bias threat
4 Familiarity threat
5 Undue influence threat
6 Management threat
7 Structural threat

Question 5

What is a Self-interest threat?

Answer 5

When there’s a financial or other ineptest what will influence judgement

Question 6

What is a Self-review threat?

Answer 6

When an audit organization evaluates it’s own non-audit work performed

Question 7

What is a Bias threat?

Answer 7

When political, social or other convictions hinder judgement

Question 8

What is a Familiarity threat?

Answer 8

When relationships within an audit entity hinder judgement

Question 9

What is an Undue influence threat?

Answer 9

When external influences and pressures hinder judgement

Question 10

What is a Management threat?

Answer 10

When an auditor performs management functions

Question 11

What is a Structural threat?

Answer 11

When an auditor is placed within the government or entity which can impact judgement

Question 12

Internal auditors are considered independent when…

Answer 12

1 Accountable to head of government entity
2 Reports results to the head and those in charge of governance
3 Has work area of audit away from staff and line of management
4 Has access to those charged with governance
5 Removed from political pressure

Question 13

Before providing NAS to an audit entity, the audit organization should determine the audit entity has…

Answer 13

Designated someone with the suitable skill, knowledge and experience to oversee the services provided by the auditor

Question 14

To establish independence for NAS services auditors should document…

Answer 14

1 Threats and safeguard
2 Entity’s managements ability to effectively oversee
3 Understanding of NAS services