Section 3: Chapter 1: Legal and Regulatory History of Internal Controls

Question 1

Budget and Accounting Procedures Act of 1950

Answer 1

Requires each federal agency head to establish and maintain internal controls.

Question 2

Federal Manager’s Financial Integrity Act of 1982 (FMFIA)

Answer 2

Requires the US Government Accountability Office to prescribe standards of internal control and the director of the Office of Management and Budget to establish guidelines for the evaluation by agencies of their systems and control.

Question 3

Single Audit Act of 1984 (Amended in 1996)

Answer 3

Requires audits of state and local governments, and nonprofit organizations receiving federal financial assistance.

Question 4

Fraud Reduction and Data Analytics Act of 2015

Answer 4

Enacted to improved Federal agency financial and administrative controls and procedures to assess and mitigate fraud risks, and to improve Federal agencies’ development and use of data analytics for the purpose of identifying, preventing, and responding to fraud, including improper payments

Question 4

Sarbanes-Oxley Act of 2002

Answer 4

Placed significant restrictions on publicly traded companies. Enacted as a result of financial and accounting scandals in 2000 and 2001.

Question 5

CFO Act of 1990

Answer 5

Requires the CFO to “develop and maintain an integrated agency accounting and financial management system, including financial reporting and internal controls.”

Question 6

Government Management Reform Act of 1994

Answer 6

Expanded the requirements of the CFO Act by requiring the 24 CFO Act agencies to prepare audited financial statements and by mandating an audited annual consolidated financial statement for the executive branch of the federal government.

Question 7

Federal Financial Management Improvement Act of 1996

Answer 7

Requires agencies to follow federal accounting standards, financial management system requirements for the federal government and the Treasury standard general ledger at the transaction level, necessitating sound internal control.

Question 8

The Accountability of Tax Dollars Act of 2002

Answer 8

Expanded the requirements for an annual audit to virtually all federal agencies.

Question 9

OMB Circular A-123

Answer 9

Management’s Responsibility for Enterprise Risk Management and Internal Control

Question 10

Green Book

Answer 10

GAO Standards for Internal Control in the Federal Government