Module 3: Accounting and Finance: Competency Area 4: Auditing

Question 1

1. What is the Federal law that specifically required existing CFO agencies to have financial statements that successfully pass a financial audit?

Answer 1

Government Management Reform Act (GMRA) of 1994

Question 2

2. What is the definition of a “successful financial audit”?

Answer 2

Achieving an unmodified audit opinion
(An unmodified opinion denotes that the audit was adequate in scope and that the financial statements are present fairly in all material respects and results of operations in conformity with generally accepted accounting principles applied on a consistent basis.)

Question 3

3. In which of the four waves of the FIAR process would a DoD entity expect to have an auditable Statement of Budgetary Resources, to include its FBwT?

Answer 3

Wave 2

Question 4

4. Government audits provide essential elements of a public accountability and what?

Answer 4

Control

Question 5

5. Which standards generally apply to Federal Government audits?

Answer 5

GAO Standards or GAGAS

Question 6

6. Who conducts, supervises, monitors, and initiates audits and investigations relating to DoD programs and operations?

Answer 6

DoDIG

Question 7

7. 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?

Answer 7

DoDIG Audit Handbook

Question 8

8. Auditors auditing with personal impairments violate which general standard?

Answer 8

Independence

Question 9

9. How many hours of continuing professional education must an auditor complete every 2 years? What is the minimum number of hours that must be completed in any year of the 2-year period?

Answer 9

80 hours in 2 years; 20 hours minimum each year

Question 10

10. The auditor is restricted access to essential data necessary to satisfy the audit objective. What type of impairment would this be?

Answer 10

External Impairment

Question 11

11. Which type of audits are expected to determine whether:
    -The financial information is presented in accordance with established or stated criteria;
    -The entity has adhered to specific financial compliance requirements; and
    -The entity’s internal control over financial reporting and/or safeguarding of assets is suitably designed and implemented to achieve the control objectives?

Answer 11

Financial Audit

Question 12

12. Which types of audits are expected to determine whether:
    -The entity is acquiring, using, and protecting its resources economically and efficiently;
    -The entity’s programs are achieving the desired results or benefits; and
    -The entity is accomplishing its mission in accordance with applicable laws, regulations, and public policies?

Answer 12

Performance Audit

Question 13

13. Which audit phase involves gathering evidence and determining materiality and significance of the findings?

Answer 13

Review phase

Question 14

14. During which audit phase would the auditor select the most important areas for audit coverage?

Answer 14

Planning Phase

Question 15

15. What document includes the audit objectives, findings, and (when appropriate) recommendations?

Answer 15

Audit Report

Question 16

16. What should be considered when evaluating the effectiveness of DoD audit organizations?

Answer 16

Audit benefits

Question 17

17. What is the name of the GAO Standard that provides reasonable assurance that DoD auditors comply with applicable auditing standards and DoD audit policies?

Answer 17

Quality Control and Assurance

Question 18

18. Inspection of office security, separate and secure storage of records and equipment, and restricted system access are examples of what kind of controls?

Answer 18

internal controls

Question 19

19. If auditors are deterred from acting objectively and exercising professional skepticism by pressures, actual or perceived, from management of the entity being audited, what would this be called?

Answer 19

Threat to auditor independence