CGAP Test UPDATED ACTUAL Exam
Questions and CORRECT Answers
Which of the followings statements about the government auditor's use of audit standards is least
accurate?
a. Government auditors may be subject to a variety or range of audits standards.
b. Government auditors are not subject to audits standards for some types of work.
c. If the audit organization follows The Institute of Internal Auditors' (IIA's)International
Standards for the Professional Practice of Internal Auditing (standards), those Standards prevail
over laws and regulations.
d. Different sets of audits standards that might be followed have many similarities. - CORRECT
ANSWER -C
Which of the following statements regarding Government Auditing Standards is the least
accurate?
a. Government Auditing Standards state that The IIA's Standards may be used in conjunction
with Government Auditing Standards, but if, if inconsistencies exist, Government Auditing
Standards prevail if cited in the report.
b. In the US, following Government Auditing Standards is statutorily required at the federal level
and for certain audits at lower levels of government.
c. Since the Government Auditing Standards focus on the auditor, Government Auditing
Standards are silent on both the role of management and on non-audit work by auditors.
d. Government Auditing Standards contain requirements for audit reporting on internal control
but do not require the auditor to render an opinion on internal control. - CORRECT
ANSWER -C
Audit at the federal, state, or local levels of government in the US are:
a. Always subject to both IIA Standards and Generally Accepted Government Auditing
Standards (GAGAS)
b. Subject to only GAGAS
c. Most commonly subject to Generally Accepted Auditing standards. GAAS)
,d. Influenced by a myriad of issued (e.g. federal, state, and local laws, audit requirements, and
policies of the audit organization). - CORRECT ANSWER -d
The 2 sets of audit standards that generally apply to government audit in the US are issued by:
a. The US Congress ad the United Nations (UN)
b. The International Organization of Supreme Audit Institutions (INTOSAI) and the US
comptroller general.
c. The IIA and the American Institute of Certified Public Accountant (AICPA).
d. The US comptroller general and the AICPA - CORRECT ANSWER -d
In addition to audit standards that generally apply in a government environment, other standards
that may be used in performance audits in countries outside the US include:
a. The IIA's Standards
b. INTONSAI Standards
c. International Standards on Auditing (ISA) from the International Federation of Accountants
(IFAC)
d. a and b
e. a, b, and c - CORRECT ANSWER -d
The AICPA's GAAS are primarily associated with :
a. performance audits
b. consulting services
c. Assistance to oversight bodies
d. Financial statement audits - CORRECT ANSWER -d
If IFAC's ISAs are being followed, any ISA will fully apply unless:
a. The IFAC has issued an amendment stating explicit that the ISA does not apply
b The supreme audit institution (SAI) makes a formal written determination that the ISA need
not be followed.
c. The auditors in charge provides a written rationale in the audit documentation.
,d. A public sector perspective - issued in the past - at the end of the ISA makes clear that the ISA
does not need to be followed. - CORRECT ANSWER -d
Under Government Auditing Standards/GAGAS, which of the following statements about
personal impairment to independence is not true?
a. Preconceived ideas abut an individual, organization, or program audited can be a personal
impairment.
b. All personal relationships with any employees of the client automatically create a personal
impairment.
c. Non-audit (consulting) work that violates one of two "overarching principles" - (1) don't do
management's job, and (2) don't audit your own work - is an impairment.
d. Even if the two principles in c. are not violated, it cannot be safety assumed that the personal
impairment caused by doing non-audit work will not exist. - CORRECT ANSWER -b
The IIA's International Professional Practices Framework (IPPF) includes the following
definition: "The combination of processes and structures implemented by the board to inform,
direct, manage and monitor the activities of the organization toward the achievement of its
objectives." According to the IPPF, this is a definition of:
a. Risk Management
b Control Management
c. Governance
d. Compliance - CORRECT ANSWER -c
IFAC's international framework does not cover all engagements. Of the following types of
engagements, that framework does cover:
a. Consulting engagements
b. Preparation of tax returns without a conclusion of assurance.
c. Assurance engagements, whether the assurance is reasonable or limited.
d. Only reasonable assurance engagements - CORRECT ANSWER -c
Under INTOSAI Auditing Standards, which of the following represents a basic principle?
, a. Prepare manuals and other written guidance and instructions concerning the conduct of audits
b. Review the efficiency and effectiveness of the SAI's internal standards and procedures
c. It is essential that auditors are independent and impartial, not only in fact but also in
appearance
d. The SAI should apply its own judgement to the diverse situations that arise in the course of
government auditing, - CORRECT ANSWER -d
The following statements refer to quality control (assessment) standards in the various audit
standards. Which statement is not true?
a. IFAC's quality control standards apply to both the organization and the auditors
b. INTOSAI standards, IIA Standards, and Government Auditing Standards all include the same
requirements for periodic external quality control reviews.
c. Both GAGAS and the IFAC standards specially recognize that internal quality control can
vary based on the size and complexity of the audit organization
d. When an audit organization seeks to enter into a contract to perform audit work in accordance
with GAGAS, the (potential) contractor should provide a copy of is external quality control
report to the contracting organization. - CORRECT ANSWER -b
In comparing The IIA's performance standards on "Communicating (Audit) Results" with the
GAGAS's reporting standards for performance audits, which of the following statement is not
true?
a. Both the IIA and the GAGAS encourage, but do not require, a statement that the report has
been done in accordance with applicable standards.
b. Both the IIA and GAGAS advocate that audit report that are clear, concise, constructive and
timely.
c. GAGAS required the views of the responsible officials; to be include in the report The IIA is
not explicit in this regard.
d. GAGAS is explicit about report contents on (1) management (internal) controls and (2)
compliance with laws and regulations; The IIA is not explicit in this regard. - CORRECT
ANSWER -a
Which of the following statements about the IIAs Implementation Standards is not true?
Questions and CORRECT Answers
Which of the followings statements about the government auditor's use of audit standards is least
accurate?
a. Government auditors may be subject to a variety or range of audits standards.
b. Government auditors are not subject to audits standards for some types of work.
c. If the audit organization follows The Institute of Internal Auditors' (IIA's)International
Standards for the Professional Practice of Internal Auditing (standards), those Standards prevail
over laws and regulations.
d. Different sets of audits standards that might be followed have many similarities. - CORRECT
ANSWER -C
Which of the following statements regarding Government Auditing Standards is the least
accurate?
a. Government Auditing Standards state that The IIA's Standards may be used in conjunction
with Government Auditing Standards, but if, if inconsistencies exist, Government Auditing
Standards prevail if cited in the report.
b. In the US, following Government Auditing Standards is statutorily required at the federal level
and for certain audits at lower levels of government.
c. Since the Government Auditing Standards focus on the auditor, Government Auditing
Standards are silent on both the role of management and on non-audit work by auditors.
d. Government Auditing Standards contain requirements for audit reporting on internal control
but do not require the auditor to render an opinion on internal control. - CORRECT
ANSWER -C
Audit at the federal, state, or local levels of government in the US are:
a. Always subject to both IIA Standards and Generally Accepted Government Auditing
Standards (GAGAS)
b. Subject to only GAGAS
c. Most commonly subject to Generally Accepted Auditing standards. GAAS)
,d. Influenced by a myriad of issued (e.g. federal, state, and local laws, audit requirements, and
policies of the audit organization). - CORRECT ANSWER -d
The 2 sets of audit standards that generally apply to government audit in the US are issued by:
a. The US Congress ad the United Nations (UN)
b. The International Organization of Supreme Audit Institutions (INTOSAI) and the US
comptroller general.
c. The IIA and the American Institute of Certified Public Accountant (AICPA).
d. The US comptroller general and the AICPA - CORRECT ANSWER -d
In addition to audit standards that generally apply in a government environment, other standards
that may be used in performance audits in countries outside the US include:
a. The IIA's Standards
b. INTONSAI Standards
c. International Standards on Auditing (ISA) from the International Federation of Accountants
(IFAC)
d. a and b
e. a, b, and c - CORRECT ANSWER -d
The AICPA's GAAS are primarily associated with :
a. performance audits
b. consulting services
c. Assistance to oversight bodies
d. Financial statement audits - CORRECT ANSWER -d
If IFAC's ISAs are being followed, any ISA will fully apply unless:
a. The IFAC has issued an amendment stating explicit that the ISA does not apply
b The supreme audit institution (SAI) makes a formal written determination that the ISA need
not be followed.
c. The auditors in charge provides a written rationale in the audit documentation.
,d. A public sector perspective - issued in the past - at the end of the ISA makes clear that the ISA
does not need to be followed. - CORRECT ANSWER -d
Under Government Auditing Standards/GAGAS, which of the following statements about
personal impairment to independence is not true?
a. Preconceived ideas abut an individual, organization, or program audited can be a personal
impairment.
b. All personal relationships with any employees of the client automatically create a personal
impairment.
c. Non-audit (consulting) work that violates one of two "overarching principles" - (1) don't do
management's job, and (2) don't audit your own work - is an impairment.
d. Even if the two principles in c. are not violated, it cannot be safety assumed that the personal
impairment caused by doing non-audit work will not exist. - CORRECT ANSWER -b
The IIA's International Professional Practices Framework (IPPF) includes the following
definition: "The combination of processes and structures implemented by the board to inform,
direct, manage and monitor the activities of the organization toward the achievement of its
objectives." According to the IPPF, this is a definition of:
a. Risk Management
b Control Management
c. Governance
d. Compliance - CORRECT ANSWER -c
IFAC's international framework does not cover all engagements. Of the following types of
engagements, that framework does cover:
a. Consulting engagements
b. Preparation of tax returns without a conclusion of assurance.
c. Assurance engagements, whether the assurance is reasonable or limited.
d. Only reasonable assurance engagements - CORRECT ANSWER -c
Under INTOSAI Auditing Standards, which of the following represents a basic principle?
, a. Prepare manuals and other written guidance and instructions concerning the conduct of audits
b. Review the efficiency and effectiveness of the SAI's internal standards and procedures
c. It is essential that auditors are independent and impartial, not only in fact but also in
appearance
d. The SAI should apply its own judgement to the diverse situations that arise in the course of
government auditing, - CORRECT ANSWER -d
The following statements refer to quality control (assessment) standards in the various audit
standards. Which statement is not true?
a. IFAC's quality control standards apply to both the organization and the auditors
b. INTOSAI standards, IIA Standards, and Government Auditing Standards all include the same
requirements for periodic external quality control reviews.
c. Both GAGAS and the IFAC standards specially recognize that internal quality control can
vary based on the size and complexity of the audit organization
d. When an audit organization seeks to enter into a contract to perform audit work in accordance
with GAGAS, the (potential) contractor should provide a copy of is external quality control
report to the contracting organization. - CORRECT ANSWER -b
In comparing The IIA's performance standards on "Communicating (Audit) Results" with the
GAGAS's reporting standards for performance audits, which of the following statement is not
true?
a. Both the IIA and the GAGAS encourage, but do not require, a statement that the report has
been done in accordance with applicable standards.
b. Both the IIA and GAGAS advocate that audit report that are clear, concise, constructive and
timely.
c. GAGAS required the views of the responsible officials; to be include in the report The IIA is
not explicit in this regard.
d. GAGAS is explicit about report contents on (1) management (internal) controls and (2)
compliance with laws and regulations; The IIA is not explicit in this regard. - CORRECT
ANSWER -a
Which of the following statements about the IIAs Implementation Standards is not true?
