Select the best answer. 1. Government Auditing Standards must be adhered to in all financial audits of 1. State and local governments 2. Federal agencies 3. Federally chartered banks 4. All of the above 2. Generally accepted government auditing standards (GAGAS) refers to standards incorporated in 1. The Yellow Book 2. The Yellow Book and OMB Circular A-133 3. The Yellow Book and the AICPA's Professional Standards 4. The Yellow Book, OMB Circular A-133, and the AICPA's Professional Standards 3. Government Auditing Standards characterizes government engagements into which of the following three categories? 1. Financial audits, compliance audits, and performance audits 2. Financial audits, operational audits, and performance audits 3. Financial audits, attest engagements, and performance audits 4. Financial audits, efficiency and effectiveness audits, and compliance audits 4. The Yellow Book's general standards apply 1. Only to financial audits 2. Only to financial audits and other attest engagements 3. To performance engagements as well as to the two types of engagements indicated earlier. 4. To all professional engagements relating to accounting 5. Per the GAO's independence standards, auditors are not permitted 1. To perform any consulting services for an audit client 2. To audit any client who has any senior-level employees who had previously worked for the audit organization in the past five years 3. To perform any management functions for an audit client 4. To assist an audit client in preparing financial statements from underlying records 6. Per the GAO standards, auditors 1. Must design their audit to provide reasonable assurance of detecting noncompliance with the terms of contracts or grant agreements 2. Are not responsible for detecting noncompliance with the terms of contracts or grant agreements but must report such noncompliance if they become aware of it 3. Must design their audit so that it is more likely than not they will detect noncompliance with terms of contracts or grant agreements 4. Are responsible for detecting noncompliance with the terms of contracts or grant agreements only insofar as such noncompliance will have a material impact on the financial statements 7. Per the GAO standards, auditors must note in their audit report 1. Only instances of fraud that are material in relation to either the financial statements or the grants and contracts that they affect 2. Only those instances of fraud that will have a material impact on the financial statements 3. All instances of fraud except those that are clearly inconsequential 4. Only those instances of fraud that have not been disclosed in the management discussion and analysis 8. Per the GAO standards, an auditor's working papers must 1. Be made public unless they contain information that would be harmful to national security 2. Contain sufficient information to document any departures from GAGAS 3. Be retained by the auditor for a period of no less than ten years 4. Include documentation that the individual auditors on the engagement have satisfied the standards' CPE requirements 9. The GAO reporting standards differ from those of the AICPA in that the GAO standards require the auditors to explicitly comment on their testing of 1. Financial transactions 2. Internal control and compliance 3. Efficiency and effectiveness 4. Government-wide statements 10. If the auditors' report discloses deficiencies in internal control, fraud, illegal acts, violations of provisions of contracts or grant agreements, or abuse, the auditors should 1. Notify the federal department designated as the cognizant agency 2. Notify all federal agencies the funds of which were subject to the violations 3. Include in the notes to the financial statements a schedule detailing the violations and indicating their impact on the financial statements 4. Obtain and report the views of responsible officials concerning the findings