CDFM - Module 3 Questions and
Answers| Latest Update
What are the threats to an Auditor's Independence? ✔️✔️- Self-Interest Threat
- Self-Review Threat
- Bias Threat
- Familiarity Threat
- Undue Influence Threat
- Management Participation
- Structural Threat
the threat that a financial or other interest will inappropriately influence an auditor's
judgement or behavior ✔️✔️self-interest threat
the threat that an auditor or audit organization that has provided non-audit services will not
appropriately evaluate the results of previous judgments made or services performed as part of
the non-audit services when forming a judgement significant to an audit ✔️✔️self-review threat
the threat that an auditor will, as a result of political, ideological, social, or other convictions,
take a position that is not objective ✔️✔️bias threat
the threat that aspects of a relationship with management or personnel of an audited entity,
such as a close or long relationship or that of an immediate or close family member, will lead an
auditor to take a position that is not objective ✔️✔️familiarity threat
the threat that external influence or pressures will impact an auditor's ability to make
independent and objective judgements ✔️✔️undue influence threat
,the threat that results from an auditor's taking on the role of management or otherwise
performing management functions on behalf of the entity undergoing an audit
✔️✔️management participation
the threat that an audit organization's placement within a Government entity, in combination
with the structure of the Government entity being audited, will impact the audit organization's
ability to perform work and report results objectively ✔️✔️structural threat
Auditor Professional Judgement ✔️✔️- Exercise reasonable care and diligence
- Maintain the highest degree of integrity, objectively and independence in applying
professional judgement to all aspects of their workl
- Use professional judgement in determining the type of assignment to be performed and the
standards that apply to the work
- Carefully define the scope of work, the methodology for gathering information, the amount of
evidence to be gathered, and the tests and procedures for work
The staff assigned to perform the audit or attestation engagement should collectively posses
___for the tasks required. ✔️✔️adequate professional proficiency
For Auditor competence, auditors must complete ___ of CPE every ___, with a minimum of ___
being completed in any one year of the two-year period, and at least ___ of the ___ be directly
related to Government auditing, the Government environment, or the specific or unique
environment in which the audited entity operates. ✔️✔️80 hrs, 2 yrs, 20 hrs, 24 hrs, 80 hrs
What are the 2 components of Quality Control and Assurance? ✔️✔️1) audit organizations must
establish a system to provide reasonable assurance that the audit org and its personnel comply
with professional standards and applicable legal and regulatory requirements
2) audit organizations performing audits and attestation engagements in accordance with
GAGAS must have an external peer review performed by reviewers independent of the audit
organization being reviewed at least once every 3 yrs.
,What groups make up the DoD Internal Audit Organization? ✔️✔️- The Office of Assistant
Inspector General for Auditing (*OIG, DoD*)
- The *Army* Audit Agency
- The *Naval* Audit Service
- The *Air Force* Audit Agency
To ensure independence, DoD audit organization should report directly to the ___ ✔️✔️Secretary
or Under Secretary of the DoD Component
GOA is headed by ___ ✔️✔️Comptroller General
How long is the appointment for GOA? ✔️✔️15-years
DoD Internal Audit Organization ensures what? ✔️✔️Written policies and procedures are
provided to guide the audit staff
Financial Audits require... ✔️✔️- Financial information that is presented in accordance with
established or stated criteria;
- Adhered to specific financial compliance required; and
- An internal control structure over financial reporting and/or safeguarding of assets that is
suitably designed and implemented to achieve the control objectives
Performance Audits require... ✔️✔️- program effectiveness, economy, and efficiency;
- internal control;
- compliance with applicable laws, regulations, and public policies;
GOA is required by law to ___ and cannot be contracted out. ✔️✔️Audit the consolidated
government financial statements.
, What are the phases of a governmental audit? ✔️✔️Plan, Review, Report
During the Audit *Planning* Phase, auditors should... ✔️✔️- Define the audit objectives and
identify what the audit is intended to accomplish
- Develop the *scope*
- Design the methodology
- Consider materiality and the effectiveness of internal controls
- Evaluate whether the audited entity has taken appropriate, corrective action to address
findings and recommendations ...
During the Audit *Review* Phase, auditors should... ✔️✔️- *gather evidence*
- obtain sufficient and appropriate evidence that computer-processed data are valid and
reliable when those data are significant to the auditor's findings
- gather evidence by officials of the audited entity as part of their ...
During the *Report* Phase, auditors should... ✔️✔️- produce a *final written report* that
includes objectives of the the audit, the findings, and when appropriate, the recommendation
- inconsistencies with last year
- a statement of opinion
What are the types of opinions? ✔️✔️- Unqualified (best)
- Qualified (exception)
- Disclaimer (unable to render an opinion)
- Adverse (material misstatement of fact & failure to follow GAAP)
The Performance Audit Reports are to include... ✔️✔️- Retrievable, suitable form
- Contents
- Objectives, scope, methodology (OSM)
Answers| Latest Update
What are the threats to an Auditor's Independence? ✔️✔️- Self-Interest Threat
- Self-Review Threat
- Bias Threat
- Familiarity Threat
- Undue Influence Threat
- Management Participation
- Structural Threat
the threat that a financial or other interest will inappropriately influence an auditor's
judgement or behavior ✔️✔️self-interest threat
the threat that an auditor or audit organization that has provided non-audit services will not
appropriately evaluate the results of previous judgments made or services performed as part of
the non-audit services when forming a judgement significant to an audit ✔️✔️self-review threat
the threat that an auditor will, as a result of political, ideological, social, or other convictions,
take a position that is not objective ✔️✔️bias threat
the threat that aspects of a relationship with management or personnel of an audited entity,
such as a close or long relationship or that of an immediate or close family member, will lead an
auditor to take a position that is not objective ✔️✔️familiarity threat
the threat that external influence or pressures will impact an auditor's ability to make
independent and objective judgements ✔️✔️undue influence threat
,the threat that results from an auditor's taking on the role of management or otherwise
performing management functions on behalf of the entity undergoing an audit
✔️✔️management participation
the threat that an audit organization's placement within a Government entity, in combination
with the structure of the Government entity being audited, will impact the audit organization's
ability to perform work and report results objectively ✔️✔️structural threat
Auditor Professional Judgement ✔️✔️- Exercise reasonable care and diligence
- Maintain the highest degree of integrity, objectively and independence in applying
professional judgement to all aspects of their workl
- Use professional judgement in determining the type of assignment to be performed and the
standards that apply to the work
- Carefully define the scope of work, the methodology for gathering information, the amount of
evidence to be gathered, and the tests and procedures for work
The staff assigned to perform the audit or attestation engagement should collectively posses
___for the tasks required. ✔️✔️adequate professional proficiency
For Auditor competence, auditors must complete ___ of CPE every ___, with a minimum of ___
being completed in any one year of the two-year period, and at least ___ of the ___ be directly
related to Government auditing, the Government environment, or the specific or unique
environment in which the audited entity operates. ✔️✔️80 hrs, 2 yrs, 20 hrs, 24 hrs, 80 hrs
What are the 2 components of Quality Control and Assurance? ✔️✔️1) audit organizations must
establish a system to provide reasonable assurance that the audit org and its personnel comply
with professional standards and applicable legal and regulatory requirements
2) audit organizations performing audits and attestation engagements in accordance with
GAGAS must have an external peer review performed by reviewers independent of the audit
organization being reviewed at least once every 3 yrs.
,What groups make up the DoD Internal Audit Organization? ✔️✔️- The Office of Assistant
Inspector General for Auditing (*OIG, DoD*)
- The *Army* Audit Agency
- The *Naval* Audit Service
- The *Air Force* Audit Agency
To ensure independence, DoD audit organization should report directly to the ___ ✔️✔️Secretary
or Under Secretary of the DoD Component
GOA is headed by ___ ✔️✔️Comptroller General
How long is the appointment for GOA? ✔️✔️15-years
DoD Internal Audit Organization ensures what? ✔️✔️Written policies and procedures are
provided to guide the audit staff
Financial Audits require... ✔️✔️- Financial information that is presented in accordance with
established or stated criteria;
- Adhered to specific financial compliance required; and
- An internal control structure over financial reporting and/or safeguarding of assets that is
suitably designed and implemented to achieve the control objectives
Performance Audits require... ✔️✔️- program effectiveness, economy, and efficiency;
- internal control;
- compliance with applicable laws, regulations, and public policies;
GOA is required by law to ___ and cannot be contracted out. ✔️✔️Audit the consolidated
government financial statements.
, What are the phases of a governmental audit? ✔️✔️Plan, Review, Report
During the Audit *Planning* Phase, auditors should... ✔️✔️- Define the audit objectives and
identify what the audit is intended to accomplish
- Develop the *scope*
- Design the methodology
- Consider materiality and the effectiveness of internal controls
- Evaluate whether the audited entity has taken appropriate, corrective action to address
findings and recommendations ...
During the Audit *Review* Phase, auditors should... ✔️✔️- *gather evidence*
- obtain sufficient and appropriate evidence that computer-processed data are valid and
reliable when those data are significant to the auditor's findings
- gather evidence by officials of the audited entity as part of their ...
During the *Report* Phase, auditors should... ✔️✔️- produce a *final written report* that
includes objectives of the the audit, the findings, and when appropriate, the recommendation
- inconsistencies with last year
- a statement of opinion
What are the types of opinions? ✔️✔️- Unqualified (best)
- Qualified (exception)
- Disclaimer (unable to render an opinion)
- Adverse (material misstatement of fact & failure to follow GAAP)
The Performance Audit Reports are to include... ✔️✔️- Retrievable, suitable form
- Contents
- Objectives, scope, methodology (OSM)
