CGFM Test 3 Exam Questions &
Answers (Grade A+)
Three Broad Government Spending Purposes -
correct answer ✅1) Current Operations
2) Capital Outlays
3) Debt Service
Present Value Analysis - Three Components -
correct answer ✅Determines what $$ Rec'd in Future is Worth
Today
1) inflation component - year over year loss in value
2) enterprise component - inherent risk
3) unique component -
Budget Accounting and Procedures Act of 1950 -
correct answer ✅Requires the head of each federal agency to
establish and maintain I/C's.
Federal Managers Financial Integrity Act of 1982 (FMFIA) -
correct answer ✅requires the head of each agency to evaluate
controls on an annual basis, reporting any weakness along with a
corrective action plan
,CGFM Test 3 Exam Questions &
Answers (Grade A+)
** (resulted in the "green book") **
Single Audit Act of 1984 (amended in 1996) -
correct answer ✅requires the audit of state and local
governments and npo's receiving federal funding
Sarbanes Oxley Act of 2002 -
correct answer ✅Placed restrictions on publicly traded companies
following Enron scandal. Requires mgmt to report on I/C's for
financial reporting in its annual report.
(ICOFR) -
correct answer ✅Internal Controls Over Financial Reporting
Chief Financial Officers Act of 1990 (CFO Act): -
correct answer ✅required 10 federal agencies to produce audited
annual financial reports that included a report on internal control.
expanded in 1994 by GMRA
INTERNAL CONTROLS -
correct answer ✅systems and techniques managers use to
,CGFM Test 3 Exam Questions &
Answers (Grade A+)
provide reasonable assurance that agency objectives met in an
effective/efficient manner, in compliance with laws/regulations, and
to safeguard assets.
Implemented to accomplish certain results, prevent problems, or
detect problems that have occurred.
Some controls can both detect and prevent problems (but only if
their existence is known).
TIME VALUE OF MONEY -
correct answer ✅Used in consideration of capital budgeting
1) Present Value Analysis
2) Future Value Analysis
3) Payback Analysis
Flowcharting -
correct answer ✅Iterative process requiring changes throughout
development, each step represents a decision, also used to
evaluate processes for effective internal controls
, CGFM Test 3 Exam Questions &
Answers (Grade A+)
Earned Value Management (EVM) -
correct answer ✅project mgmt system that weighs both schedule
and cost performance to determine if a project is delivering
expected results on time and within budget
Regression Analysis -
correct answer ✅Predicts the relationship between variables:
1) Direct Linear Regression
2) Indirect Linerar Regression
3) Non-linear Regression
4) No Relationship
** See Limits of Regression Analysis
Correlation Coefficient -
correct answer ✅Determines the degree of accuracy the analysis
(variables) can be used to predict results (1=perfect correlation
.85 considered reliable for forecasting)
Answers (Grade A+)
Three Broad Government Spending Purposes -
correct answer ✅1) Current Operations
2) Capital Outlays
3) Debt Service
Present Value Analysis - Three Components -
correct answer ✅Determines what $$ Rec'd in Future is Worth
Today
1) inflation component - year over year loss in value
2) enterprise component - inherent risk
3) unique component -
Budget Accounting and Procedures Act of 1950 -
correct answer ✅Requires the head of each federal agency to
establish and maintain I/C's.
Federal Managers Financial Integrity Act of 1982 (FMFIA) -
correct answer ✅requires the head of each agency to evaluate
controls on an annual basis, reporting any weakness along with a
corrective action plan
,CGFM Test 3 Exam Questions &
Answers (Grade A+)
** (resulted in the "green book") **
Single Audit Act of 1984 (amended in 1996) -
correct answer ✅requires the audit of state and local
governments and npo's receiving federal funding
Sarbanes Oxley Act of 2002 -
correct answer ✅Placed restrictions on publicly traded companies
following Enron scandal. Requires mgmt to report on I/C's for
financial reporting in its annual report.
(ICOFR) -
correct answer ✅Internal Controls Over Financial Reporting
Chief Financial Officers Act of 1990 (CFO Act): -
correct answer ✅required 10 federal agencies to produce audited
annual financial reports that included a report on internal control.
expanded in 1994 by GMRA
INTERNAL CONTROLS -
correct answer ✅systems and techniques managers use to
,CGFM Test 3 Exam Questions &
Answers (Grade A+)
provide reasonable assurance that agency objectives met in an
effective/efficient manner, in compliance with laws/regulations, and
to safeguard assets.
Implemented to accomplish certain results, prevent problems, or
detect problems that have occurred.
Some controls can both detect and prevent problems (but only if
their existence is known).
TIME VALUE OF MONEY -
correct answer ✅Used in consideration of capital budgeting
1) Present Value Analysis
2) Future Value Analysis
3) Payback Analysis
Flowcharting -
correct answer ✅Iterative process requiring changes throughout
development, each step represents a decision, also used to
evaluate processes for effective internal controls
, CGFM Test 3 Exam Questions &
Answers (Grade A+)
Earned Value Management (EVM) -
correct answer ✅project mgmt system that weighs both schedule
and cost performance to determine if a project is delivering
expected results on time and within budget
Regression Analysis -
correct answer ✅Predicts the relationship between variables:
1) Direct Linear Regression
2) Indirect Linerar Regression
3) Non-linear Regression
4) No Relationship
** See Limits of Regression Analysis
Correlation Coefficient -
correct answer ✅Determines the degree of accuracy the analysis
(variables) can be used to predict results (1=perfect correlation
.85 considered reliable for forecasting)
