GFOA CPFO - Accounting and Financial
Reporting UPDATED ACTUAL Exam
Questions and CORRECT Answers
Ultimate responsibility for internal control rests with - CORRECT ANSWER - The
governing board
Which of the following types of fraud is least likely in an environment where cash receipting and
record keeping for accounts receivable are adequately segregated? - CORRECT
ANSWER - Lapping
What is the best way to select a sample to test internal control? - CORRECT ANSWER -
Random sampling
All of the following are examples of permanent risk: - CORRECT ANSWER -
Complexity, Cash receipts, Prior problems
Which are examples of a control procedure? - CORRECT ANSWER - Authorization,
Segregation of incompatible duties, Analytical review
Which of the following is the most important element in a comprehensive framework of internal
controls? - CORRECT ANSWER - Control environment
Which of the following is an implicit assertion made in financial reporting? - CORRECT
ANSWER - Existence or occurrence, Completeness, Rights and obligations
Which of the following control-related procedures is the most useful in meeting the implicit
assertion of completeness? - CORRECT ANSWER - Analytical procedures
Which of the following is an inherent limitation of internal controls? - CORRECT
ANSWER - Principle of cost/benefit, Collusion, Management override
, Which of the following is the most significant factor promoting fraud? - CORRECT
ANSWER - Opportunity
What is the primary role of most internal audit staff? - CORRECT ANSWER - Assist
management in monitoring the effectiveness of internal controls
Which of the following is one of the five essential elements of a comprehensive framework of
internal controls? - CORRECT ANSWER - Control environment, Risk assessment,
Communication
Which of the following are one of the four principles that is related to risk assessment activities?
- CORRECT ANSWER - Identification and assessment of changes, Identification of risks,
Alertness to fraud
The letter of transmittal would be included in what section of the CAFR? - CORRECT
ANSWER - Introductory
Proprietary funds are mandatory for which of the following? - CORRECT ANSWER -
Principal revenue source associated with debt backed solely by fees
A criteria for blending a component unit is: - CORRECT ANSWER - Shared governing
board and a financial benefit or burden relationship
The paramount objective of general purpose external financial reporting is: - CORRECT
ANSWER - Accountability
Which of the following has the highest authoritative status? - CORRECT ANSWER -
GASB Statement
Reporting UPDATED ACTUAL Exam
Questions and CORRECT Answers
Ultimate responsibility for internal control rests with - CORRECT ANSWER - The
governing board
Which of the following types of fraud is least likely in an environment where cash receipting and
record keeping for accounts receivable are adequately segregated? - CORRECT
ANSWER - Lapping
What is the best way to select a sample to test internal control? - CORRECT ANSWER -
Random sampling
All of the following are examples of permanent risk: - CORRECT ANSWER -
Complexity, Cash receipts, Prior problems
Which are examples of a control procedure? - CORRECT ANSWER - Authorization,
Segregation of incompatible duties, Analytical review
Which of the following is the most important element in a comprehensive framework of internal
controls? - CORRECT ANSWER - Control environment
Which of the following is an implicit assertion made in financial reporting? - CORRECT
ANSWER - Existence or occurrence, Completeness, Rights and obligations
Which of the following control-related procedures is the most useful in meeting the implicit
assertion of completeness? - CORRECT ANSWER - Analytical procedures
Which of the following is an inherent limitation of internal controls? - CORRECT
ANSWER - Principle of cost/benefit, Collusion, Management override
, Which of the following is the most significant factor promoting fraud? - CORRECT
ANSWER - Opportunity
What is the primary role of most internal audit staff? - CORRECT ANSWER - Assist
management in monitoring the effectiveness of internal controls
Which of the following is one of the five essential elements of a comprehensive framework of
internal controls? - CORRECT ANSWER - Control environment, Risk assessment,
Communication
Which of the following are one of the four principles that is related to risk assessment activities?
- CORRECT ANSWER - Identification and assessment of changes, Identification of risks,
Alertness to fraud
The letter of transmittal would be included in what section of the CAFR? - CORRECT
ANSWER - Introductory
Proprietary funds are mandatory for which of the following? - CORRECT ANSWER -
Principal revenue source associated with debt backed solely by fees
A criteria for blending a component unit is: - CORRECT ANSWER - Shared governing
board and a financial benefit or burden relationship
The paramount objective of general purpose external financial reporting is: - CORRECT
ANSWER - Accountability
Which of the following has the highest authoritative status? - CORRECT ANSWER -
GASB Statement
