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CGFM Exam 2 > Sec 1, Ch 1 - Govt. Accounting, Financial Reporting, Budgeting > Flashcards

Sec 1, Ch 1 - Govt. Accounting, Financial Reporting, Budgeting Flashcards

1
Q

Name the 4 types of accountability.

A

1) Operational
2) Fiscal
3) Legal
4) Performance

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2
Q

Where does the government derive most of their resources?

A

By levying taxes

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3
Q

Name one difference governments differ from the private sector. (Multiple answers acceptable)

A

1) Governments do not make money/profit
2) No shareholders
3) Provide services to the public

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4
Q

Why is the budget process important for governments?

A

Governments are legally bound to the budget and it establishes spending authorizations and specifies restrictions on the use of resources

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5
Q

What is the primary control device in government?

A

The budget process

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6
Q

The primary mechanism in which governments measure and demonstrate accountability

A

Financial Reporting

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7
Q

What is the cornerstone of financial reporting?

A

Accountability

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8
Q

Performance Accountability

A

Ensuring governments act in an efficient, effective, and economic manner

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9
Q

Fiscal Accountability

A

Associated with the raising of resources to accomplish objectives

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10
Q

Operational Accountability

A

The stewardship of public resources

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11
Q

What does the executive and legislative branch rely on to demonstrate accountability?

A

Financial Reporting

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12
Q

Legal Accountability

A

The need to comply with laws, rules, and regulations

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13
Q

The notion of assessing whether the government’s financial position improved or deteriorated over the period

A

Interperiod Equity

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14
Q

What is the primary accountability mechanism that allows Congress to monitor the financial effects of spending?

A

Debt Ceiling

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15
Q

Give an example of Intergenerational Equity

A

Social Security

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16
Q

Users of Financial Reports (5)

A

1) Legislatures and oversight groups
2) Citizens
3) Investors and creditors
4) Managers
5) Media

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17
Q

The legislature establishes this to see if actual expenditures were within authorized levels

A

Budgetary Appropriations

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18
Q

Why do tax payers care and concentrate about accountability?

A

They want to ensure operating results and the safeguarding of public tax payer $

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19
Q

Why do investors/creditors use financial reports?

A

To determine compliance with contractual agreements related to debt issues

To determine if they wish to purchase government debt instruments

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20
Q

Why does the media care about financial reports?

A

It publicizes requests for public input on developing priorities of government operations

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21
Q

Why are financial reports important to managers?

A

To determine the government is operating within budgetary parameters, restrictions, laws/regulations, and public policy

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22
Q

Financial reporting assists users in doing what two (2) things?

A

1) Ensure accountability

2) Help make economic, social, and politic decisions

23
Q

What do governments supplement with financial reports to determine if programs are operating effectively?

A

Supplemental financial reports with performance measures

24
Q

Two types of financial reports and respective examples?

A

1) Point-in-time Reports, ex. Balance sheet

2) Period Reports, ex. Operating Statement

25
Q

What is a point-in-time report?

A

Provides current information as of a certain date

26
Q

What is a period report?

A

A report that covers the entire fiscal year or reporting period

27
Q

Consist primarily of the audited financial statements, including notes to the FS, required supplemental information, and other accompanying information

A

General Purpose External Financial Reports (GPEFR)

28
Q

What are the six (6) reporting characteristics?

A

1) Understandability
2) Reliability
3) Relevance
4) Timeliness
5) consistency
6) Comparability

29
Q

True or False: Financial Reports are the only source of information that may be needed by users to make decisions

A

False

30
Q

What type of laws ensure facilitation of obtaining data from their governments?

A

Freedom of Information laws, or “Sunshine Laws”

31
Q

What are “sunshine laws”?

A

Implies the government should operate openly, or in the “sunshine”

32
Q

What website was created to allow citizens to monitor progress of awarding funds to stimulate the economy and create jobs?

A

American Recovery and Reinvestment Act (Recovery.gov)

33
Q

What is the Federal Open Government Initiative?

A

An effort by the Federal government to create a level of openness in government.

34
Q

What are the five (5) purposes of the DATA Act?

A

1) Expand the Federal Funding Accountability and Transparency Act of 2006 to track federal funding effectively
2) Establish government-wide standards
3) Simplify reporting
4) Improve the quality of data
5) Apply approaches developed

35
Q

When was the Securities and Exchange Commission (SEC) established?

A

1934 after the collapse of the stock market in 1929

36
Q

What does FASB stand for and what are they responsible for?

A

Financial Accounting Standards Board; vested with the authority to establish accounting and reporting standards for private sector companies, including not-for-profit entities

37
Q

What are the two missions of GASB?

A

1) Set and improve standards of state/local accounting and financial reporting
2) Guide and educate the public and users of financial reports

38
Q

What are the five (5) GASB rules of procedures to guide its activities?

A

1) Establishment of a task force to provide feedback on an issue
2) Publishing documents for public comment
3) Distributing an exposure draft for comment
4) Conducting public hearings on due process documents
5) Issuing a final standard

39
Q

What is the FASAB?

A

Federal Accounting Standards Advisory Board; sets the standards by improving federal financial reporting by issuing federal accounting standards and guidance to external users

40
Q

What are the six (6) rules of procedures for FASAB?

A

1) Identify accounting issues
2) Prepare documents
3) Release preliminary documents
4) Release exposure draft
5) Vote
6) Issue final pronouncement

41
Q

What do Due Process Procedures accomplish?

A

Ensures a timely, thorough, and open study of accounting and financial reporting issues.

42
Q

What are four (4) documents used to enable due process before issues of a final standard?

A

1) Discussion Memorandum (DM)
2) Invitation to Comment (ITC)
3) Preliminary Views (PV)
4) Exposure Draft (ED)

43
Q

What is a Discussion Memorandum?

A

Outlines the results of research efforts of staff and defines the account and reporting issues for a particular project

44
Q

What is an Invitation to Comment?

A

Contains elements of the discussion memorandum; allows respondents to comment on a research report.

45
Q

What is a Preliminary View?

A

The board’s initial proposal for an accounting and reporting standard

46
Q

What is an Exposure Draft?

A

The last due process document; in the format of the final standard, constituents have opportunity for comments.

47
Q

What is a Statement?

A

Sets forth the accounting and reporting standard that should be followed by preparers and auditors of financial statements

48
Q

What is a Concept Statement?

A

Describes the concepts the board will use as a framework to evaluate existing standards.

49
Q

What are Interpretations or Technical Bulletins?

A

Clarifies points that may be ambiguous in a prior standard

50
Q

What Statement provides the hierarchy for FASAB?

A

Statement of Federal Financial Accounting Standards, SFFAS 34

51
Q

What is the FASAB hierarchy listed in descending order of authority?

A

Category a) Officially established FASAB accounting principles
Category b) FASAB technical bulletins
Category c) Technical releases of the Accounting and Auditing Policy Committee of FASAB
Category d) Implementation guides published by FASAB staff

52
Q

What Statement provides the hierarchy for GASB accounting principals?

A

GASB Statement No. 76, The Hierarchy of Generally Accepting Accounting Principles for State/Local Governments

53
Q

What do public officials use to raise revenues?

A

Sovereign power of government

CGFM Exam 2 (6 decks)

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