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Under government fuditing standards, auditors performing financial statement audits must
Government Auditing Standards (GAS):
GAS, often referred to as the Yellow Book, outlines the responsibilities of auditors conducting financial statement audits for government entities.
One core requirement is that auditors must consider compliance with applicable laws, regulations, contracts, and grant agreements that could materially affect financial statements.
Explanation of Answer Choices:
A . Design tests to assess compliance with laws, regulations, contracts, and grant agreements: Correct. This is a required component under GAS to ensure financial statements are materially accurate and comply with legal and regulatory frameworks.
B . Identify violations of laws which could be punishable by monetary penalties: Incorrect. Auditors are not required to investigate or pursue penalties but to focus on material misstatements or risks.
C . Identify expenditures that exceed the related obligations: Incorrect. While this could indicate an issue, auditors are not required to specifically test for this unless it relates to material misstatements or compliance issues.
D . Design tests to detect fraud, waste, and abuse: Incorrect. Auditors are not specifically required to detect fraud, waste, and abuse, though they should be alert to indicators.
Government Accountability Office (GAO), Government Auditing Standards (Yellow Book).
Uniform Guidance (2 CFR Part 200), Audit Requirements for Federal Programs.
The first step when gathering data for making strategic sourcing decisions is
What Is Strategic Sourcing? Strategic sourcing is a systematic process aimed at optimizing an organization's purchasing activities to maximize value and minimize costs. It involves analyzing spending, selecting suppliers, and negotiating contracts strategically rather than reactively.
Why Start with Spend Data?
Analyzing Spend Data: The first step is to understand the organization's current spending patterns by analyzing spend data by category and by business unit. This helps identify high-cost areas, redundancies, and opportunities for cost savings.
Importance of Data-Driven Decisions: Without knowing where and how money is being spent, it's impossible to make informed strategic sourcing decisions.
Why Other Options Are Incorrect:
A . Contacting Vendors: Vendors are contacted later in the process after the spend analysis is complete and sourcing strategies are determined.
C . Contacting Business Units: While checking for existing contracts is part of the process, it happens after analyzing spend data.
D . Developing Supplier Performance Measures: This step occurs much later, typically after supplier selection and contract execution.
Reference and Documents:
GAO Guide to Strategic Sourcing (2013): Recommends starting with a detailed spend analysis as the foundation for effective sourcing decisions.
Which of the following disbursement techniques can be used to ensure timely payments?
What Are Disbursement Techniques?
Disbursement techniques refer to the methods used by organizations to pay vendors or settle financial obligations. The timeliness of payments depends on the technique used.
Why Are Drafts the Best Option for Timely Payments?
A draft is a payment instrument issued by an organization's bank, drawn against its account, and typically includes specific payment timing instructions.
Drafts allow the payer to specify the timing of payments, ensuring they are made on time.
Why Other Options Are Incorrect:
A . Warrants: Warrants authorize payments but do not ensure timeliness as they require additional processing before funds are disbursed.
B . Checks: Checks rely on postal delivery and clearing times, which may delay payments.
D . Bank cards: While convenient, bank cards are typically used for immediate payments, not for ensuring future timely disbursements.
Reference and Documents:
Treasury Financial Manual: Highlights drafts as a disbursement tool for controlling the timing of payments.
GAO Cash Management Guide: Discusses the benefits of drafts in ensuring timely payments.
All of the following represent selection criteria used to make contract awards EXCEPT contractor
Selection Criteria for Contract Awards:
When awarding contracts, federal, state, and local governments typically evaluate contractors based on objective criteria like staff expertise, past performance, and financial position to ensure the contractor can successfully fulfill the contract requirements.
Union affiliation is irrelevant to the contractor's ability to meet the contractual obligations and is not a valid selection criterion.
Explanation of Answer Choices:
A . Staff expertise: Correctly used to ensure the contractor has qualified personnel.
B . Past performance records: Correctly used to evaluate the contractor's historical success in fulfilling similar contracts.
C . Union affiliations: Correct. This is not considered a valid selection criterion for contract awards.
D . Financial position: Correctly used to assess the contractor's financial stability.
Federal Acquisition Regulation (FAR) Part 15, Contracting by Negotiation.
Office of Management and Budget (OMB) Circular A-102, Grant and Contract Management Requirements.
Performance measures that relate program inputs to program outcomes are called
Definition of Cost-Effectiveness Measures:
Cost-effectiveness measures assess the relationship between inputs (resources used) and outcomes (results achieved) to determine whether a program delivers value for the resources invested.
Explanation of Answer Choices:
A . Efficiency measures: Incorrect. These relate inputs to outputs, focusing on how efficiently resources are used to produce services, but not directly tied to outcomes.
B . Process measures: Incorrect. These measure activities or steps within a program but do not assess outcomes.
C . Cost-effectiveness measures: Correct. These directly link inputs to outcomes, measuring the program's effectiveness in achieving its objectives relative to costs.
D . Activity measures: Incorrect. These track the level of activity or effort but not outcomes or effectiveness.
GASB, Performance Measurement and Reporting for Government Programs.
GAO, Best Practices in Measuring Program Effectiveness.
