CGFM TEST 3 2025 Questions and
Answers
Three Broad Government Spending Purposes - --Answer --1) Current
Operations
2) Capital Outlays
3) Debt Service
Present Value Analysis - Three Components - --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 - --Answer --Requires the
head of each federal agency to establish and maintain I/C's.
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,Federal Managers Financial Integrity Act of 1982 (FMFIA) - --Answer --
requires the head of each agency to evaluate controls on an annual basis, reporting
any weakness along with a corrective action plan
** (resulted in the "green book") **
Single Audit Act of 1984 (amended in 1996) - --Answer --requires the audit
of state and local governments and npo's receiving federal funding
Sarbanes Oxley Act of 2002 - --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) - --Answer --Internal Controls Over Financial Reporting
Chief Financial Officers Act of 1990 (CFO Act): - --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 - --Answer --systems and techniques managers
use to provide reasonable assurance that agency objectives met in an
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
,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 - --Answer --Used in consideration of capital
budgeting
1) Present Value Analysis
2) Future Value Analysis
3) Payback Analysis
Flowcharting - --Answer --Iterative process requiring changes throughout
development, each step represents a decision, also used to evaluate processes for
effective internal controls
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, Earned Value Management (EVM) - --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 - --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 - --Answer --Determines the degree of accuracy the
analysis (variables) can be used to predict results (1=perfect correlation
.85 considered reliable for forecasting)
Multiple Regressions - --Answer --analyzes multiple IV's and look for items
with the highest correlation coefficient as being the most like predictors
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Answers
Three Broad Government Spending Purposes - --Answer --1) Current
Operations
2) Capital Outlays
3) Debt Service
Present Value Analysis - Three Components - --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 - --Answer --Requires the
head of each federal agency to establish and maintain I/C's.
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 1
,Federal Managers Financial Integrity Act of 1982 (FMFIA) - --Answer --
requires the head of each agency to evaluate controls on an annual basis, reporting
any weakness along with a corrective action plan
** (resulted in the "green book") **
Single Audit Act of 1984 (amended in 1996) - --Answer --requires the audit
of state and local governments and npo's receiving federal funding
Sarbanes Oxley Act of 2002 - --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) - --Answer --Internal Controls Over Financial Reporting
Chief Financial Officers Act of 1990 (CFO Act): - --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 - --Answer --systems and techniques managers
use to provide reasonable assurance that agency objectives met in an
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 2
,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 - --Answer --Used in consideration of capital
budgeting
1) Present Value Analysis
2) Future Value Analysis
3) Payback Analysis
Flowcharting - --Answer --Iterative process requiring changes throughout
development, each step represents a decision, also used to evaluate processes for
effective internal controls
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 3
, Earned Value Management (EVM) - --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 - --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 - --Answer --Determines the degree of accuracy the
analysis (variables) can be used to predict results (1=perfect correlation
.85 considered reliable for forecasting)
Multiple Regressions - --Answer --analyzes multiple IV's and look for items
with the highest correlation coefficient as being the most like predictors
....COPYRIGHT ©️ 2025 ALL RIGHTS RESERVED...TRUSTED & VERIFIED 4
