CGFM TEST 3 QUESTIONS AND CORRECT ANSWERS

CGFM TEST 3 QUESTIONS AND
CORRECT ANSWERS
ThreeA2BroadA2GovernmentA2SpendingA2PurposesA2-A2Ans--1)A2CurrentA2Operations
2)A2CapitalA2Outlays
3)A2DebtA2Service

PresentA2ValueA2AnalysisA2-A2ThreeA2ComponentsA2-A2Ans--DeterminesA2whatA2$
$A2Rec'dA2inA2FutureA2isA2WorthA2Today

1)A2inflationA2componentA2-A2yearA2overA2yearA2lossA2inA2value
2)A2enterpriseA2componentA2-A2inherentA2risk
3)A2uniqueA2componentA2-

BudgetA2AccountingA2andA2ProceduresA2ActA2ofA21950A2-A2Ans--
RequiresA2theA2headA2ofA2eachA2federalA2agencyA2toA2establishA2andA2maintainA2I/C's.

FederalA2ManagersA2FinancialA2IntegrityA2ActA2ofA21982A2(FMFIA)A2-A2Ans--
requiresA2theA2headA2ofA2eachA2agencyA2toA2evaluateA2controlsA2onA2anA2annualA2basis,A2
reportingA2anyA2weaknessA2alongA2withA2aA2correctiveA2actionA2plan
**A2(resultedA2inA2theA2"greenA2book")A2**

SingleA2AuditA2ActA2ofA21984A2(amendedA2inA21996)A2-A2Ans--
requiresA2theA2auditA2ofA2stateA2andA2localA2governmentsA2andA2npo'sA2receivingA2federal
A2funding


SarbanesA2OxleyA2ActA2ofA22002A2-A2Ans--
PlacedA2restrictionsA2onA2publiclyA2tradedA2companiesA2followingA2EnronA2scandal.A2Req
uiresA2mgmtA2toA2reportA2onA2I/C'sA2forA2financialA2reportingA2inA2itsA2annualA2report.

(ICOFR)A2-A2Ans--InternalA2ControlsA2OverA2FinancialA2Reporting

ChiefA2FinancialA2OfficersA2ActA2ofA21990A2(CFOA2Act):A2-A2Ans--
requiredA210A2federalA2agenciesA2toA2produceA2auditedA2annualA2financialA2reportsA2thatA2
includedA2aA2reportA2onA2internalA2control.

expandedA2inA21994A2byA2GMRA

INTERNALA2CONTROLSA2-A2Ans--
systemsA2andA2techniquesA2managersA2useA2toA2provideA2reasonableA2assuranceA2thatA2
agencyA2objectivesA2metA2inA2anA2effective/
efficientA2manner,A2inA2complianceA2withA2laws/
regulations,A2andA2toA2safeguardA2assets.A2

,ImplementedA2toA2accomplishA2certainA2results,A2preventA2problems,A2orA2detectA2proble
msA2thatA2haveA2occurred.

SomeA2controlsA2canA2bothA2detectA2andA2preventA2problemsA2(butA2onlyA2ifA2theirA2existe
nceA2isA2known).

TIMEA2VALUEA2OFA2MONEYA2-A2Ans--UsedA2inA2considerationA2ofA2capitalA2budgeting

1)A2PresentA2ValueA2Analysis
2)A2FutureA2ValueA2Analysis
3)A2PaybackA2Analysis

FlowchartingA2-A2Ans--
IterativeA2processA2requiringA2changesA2throughoutA2development,A2eachA2stepA2represe
ntsA2aA2decision,A2alsoA2usedA2toA2evaluateA2processesA2forA2effectiveA2internalA2controls

EarnedA2ValueA2ManagementA2(EVM)A2-A2Ans--
projectA2mgmtA2systemA2thatA2weighsA2bothA2scheduleA2andA2costA2performanceA2toA2det
ermineA2ifA2aA2projectA2isA2deliveringA2expectedA2resultsA2onA2timeA2andA2withinA2budget

RegressionA2AnalysisA2-A2Ans--PredictsA2theA2relationshipA2betweenA2variables:

1)A2DirectA2LinearA2Regression
2)A2IndirectA2LinerarA2Regression
3)A2Non-linearA2Regression
4)A2NoA2Relationship

**A2SeeA2LimitsA2ofA2RegressionA2Analysis

CorrelationA2CoefficientA2-A2Ans--
DeterminesA2theA2degreeA2ofA2accuracyA2theA2analysisA2(variables)A2canA2beA2usedA2toA2p
redictA2resultsA2(1=perfectA2correlation

.85A2consideredA2reliableA2forA2forecasting)

MultipleA2RegressionsA2-A2Ans--
analyzesA2multipleA2IV'sA2andA2lookA2forA2itemsA2withA2theA2highestA2correlationA2coefficie
ntA2asA2beingA2theA2mostA2likeA2predictors

LimitsA2ofA2RegressionA2AnalysisA2-A2Ans--
DataA2rangesA2mustA2beA2relevantA2(e.g.,A2sampleA2sizeA2mightA2beA2tooA2smallA2toA2proje
ctA2onA2aA2largerA2population)
DifficultA2toA2findA2dataA2setsA2withA2highA2correlationA2coefficients
BadA2dataA2=A2badA2resultsA2(garbageA2in,A2garbageA2out)
CorrelationA2isA2notA2Causation,A2haveA2toA2beA2ableA2toA2explainA2howA2oneA2setA2ofA2dat
aA2wouldA2influenceA2another

,DataA2AnalyticsA2-A2Ans--
inspecting,A2cleaning,A2transforming,A2andA2modelingA2dataA2toA2findA2usefulA2information
,A2conclusions,A2andA2supportA2decisionA2making

DataA2MiningA2-A2Ans--
(Predictive)A2sortingA2throughA2largeA2dataA2setsA2andA2usingA2filtersA2andA2algorithmsA2to
A2pickA2outA2relationships


**A2SeeA2strengthsA2andA2weaknesses

PredictiveA2AnalyticsA2-A2Ans--
dataA2collectedA2throughA2aA2varietyA2ofA2techniquesA2toA2analyzeA2currentA2andA2historic
alA2factsA2toA2makeA2predictionsA2aboutA2futureA2events

DataA2MiningA2StrengthsA2andA2WeaknessesA2-A2Ans--*A2Strengths
AnalystA2isA2ableA2toA2reviewA2completeA2dataA2sets
AbilityA2toA2linkA2togetherA2multipleA2dataA2sources

*A2Weaknesses
MustA2haveA2qualityA2data
MustA2haveA2abilityA2toA2understandA2programA2requirementsA2andA2howA2thisA2isA2repres
entedA2inA2theA2data

StartingA2aA2DataA2AnalyticA2ProgramA2-A2Ans--
CollaborateA2withA2otherA2agenciesA2forA2dataA2collectionA2andA2sharing
DetermineA2ROIA2inA2AnalyticsA2Programs
GiveA2leadersA2clearA2conciseA2analysisA2theyA2canA2useA2toA2supportA2dataA2drivenA2pro
grams
EnableA2employeesA2atA2allA2levelsA2toA2seeA2andA2utilizeA2dataA2forA2theirA2needsA2(notA2j
ustA2theA2needsA2ofA2seniorA2leaders
ManagersA2toA2demandA2theA2useA2ofA2dataA2andA2provideA2employeesA2withA2targetedA2
onA2theA2jobA2training

ForensicA2AuditingA2-A2Ans--
examinationA2ofA2financialA2informationA2thatA2isA2likelyA2toA2beA2usedA2forA2theA2investigat
ionA2andA2prosecutionA2ofA2financialA2crimesA2

NeedA2toA2haveA2knowledgeA2ofA2basicA2legalA2principles,A2standardsA2forA2discovery

StepsA2forA2ForensicA2AuditingA2-A2Ans--a)A2dataA2collection,
A2b)A2dataA2preparation,A2
c)A2dataA2analysis,A2
andA2d)A2reporting

, BenfordA2DigitalA2AnalysisA2-A2Ans--
basedA2onA2observationA2thatA2moreA2transactionsA2beginA2withA2theA2numberA2oneA2than
A2largerA2numbers.A2MoreA2transactionsA2willA2startA2withA2numberA2oneA2thanA2numberA2t
woA2...A2andA2moreA2withA2numberA2two,A2thanA2numberA2three,A2etc...

BecauseA2thereA2isA2anA2expectedA2distributionA2ofA2numbers,A2theA2testingA2anA2pointA2o
utA2potentiallyA2fraudulentA2transactions

CompetitiveA2SourceA2AnalysisA2-A2Ans--
UsedA2toA2determineA2ifA2thereA2isA2aA2benefitA2toA2contractingA2governmentA2servicesA2to
A2theA2privateA2sector:


1)A2ConductA2aA2managementA2study
2)A2PrepareA2aA2performanceA2workA2statementA2-A2definesA2theA2expectedA2outputs/
results
3)A2ProjectA2theA2in-houseA2andA2contractA2costs
4)A2SelectA2theA2bestA2alternativeA2-A2combinationA2ofA2performanceA2andA2price

RatioA2AnalysisA2-A2Ans--
ActiveA2useA2ofA2numbersA2toA2pointA2outA2problemsA2andA2indicateA2performance,A2quest
ionsA2toA2ask,A2etc.A2TheyA2serveA2asA2startingA2pointsA2forA2furtherA2inquiry.A2

Ex.A2numbersA2revealingA2thatA2receivablesA2areA2increasingA2couldA2triggerA2anA2increas
eA2inA2debtA2collectionA2efforts.A2OtherA2rationsA2couldA2indicateA2fiscalA2stress,A2adequac
yA2ofA2reserves,A2liquidity,A2workloads,A2responseA2times,A2andA2accuracyA2rates.

PureA2RatiosA2-A2Ans--
relatingA2oneA2numberA2toA2anotherA2toA2createA2aA2meaningfulA2indicatorA2ofA2performan
ceA2(ex.,A2totalA2expendituresA2toA2budget).

ComparativeA2AnalysisA2-A2Ans--
ComparingA2entitiesA2numbersA2andA2ratiosA2toA2anotherA2agencyA2orA2benchmarks.A2Cre
ditA2ratingA2agenciesA2alsoA2publishA2medianA2ratiosA2byA2industryA2andA2whatA2theyA2con
siderA2toA2beA2reasonableA2rangesA2andA2ratios

TimeA2SeriesA2AnalysisA2-A2Ans--
comparingA2theA2agencyA2againstA2itselfA2overA2time,A2ex.A2CalculatingA2theA2percentageA
2changeA2fromA2yearA2toA2year


CommonA2SizeA2StatementsA2-A2Ans--
convertsA2allA2dataA2elementsA2inA2aA2statementA2toA2percentagesA2ofA2100,A2ExaminesA2
expendituresA2ofA2aA2functionA2asA2comparedA2toA2totalA2expendituresA2(ex.,A2percentage
A2ofA2totalA2budgetA2spentA2onA2publicA2safetyA2yearA2overA2year,A2andA2ifA2itA2isA2growingA
2disproportionatelyA2toA2otherA2programs)


PerA2CapitaA2InformationA2-A2Ans--DebtA2perA2capita