Discuss AGA GFMC Exam Topic 5 Question 2

A single audit report will include an opinion or disclaimer of opinion that the financial statements are

Afree from fraud.

Bfairly presented in accordance with GAAP.

Cfairly presented in accordance with GASB.

Dfairly presented in accordance with GAO.

Suggested Answer: B

Single Audit Report Requirements:

A single audit evaluates the financial statements and compliance with federal award requirements.

The financial statement opinion must state whether the financial statements are fairly presented in accordance with Generally Accepted Accounting Principles (GAAP).

Explanation of Answer Choices:

A . Free from fraud: Incorrect. Auditors do not provide an opinion on fraud; they assess for material misstatements.

B . Fairly presented in accordance with GAAP: Correct. The financial statement opinion is issued based on compliance with GAAP.

C . Fairly presented in accordance with GASB: Incorrect. GASB (Governmental Accounting Standards Board) provides guidance for state and local governments, but financial statements must comply with GAAP as the overarching standard.

D . Fairly presented in accordance with GAO: Incorrect. The GAO (Government Accountability Office) issues auditing standards, not financial reporting standards.

OMB Uniform Guidance (2 CFR Part 200), Subpart F - Audit Requirements.

GAO, Government Auditing Standards (Yellow Book).

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29 comments · newest first

Avery 10 months ago

I thought it was A at first, but B makes more sense.

Nada 10 months ago

D seems off, GAO isn’t the right framework here.

Amie 10 months ago

Wait, are we sure it’s not C?

Ira 10 months ago

I agree, B is the right choice.

Kristine 11 months ago

Definitely B, GAAP is the standard!

India 11 months ago

I recall that single audits are usually about compliance with GAAP, so I’m leaning towards B as well. But I hope I’m not mixing it up with something else!

Elmira 11 months ago

I’m a bit confused about the differences between GAAP and GASB. I think it’s B, but I could see how someone might choose C.

Corinne 11 months ago

I remember practicing a similar question where the focus was on GAAP compliance. I feel like B is definitely the right choice here.

Freeman 11 months ago

I think the answer might be B, but I'm not completely sure if it could also be C since GASB relates to government entities.

Muriel 12 months ago

I'm a bit confused on this one. Is the single audit report just about the financial statements, or does it cover other areas as well? I'm not sure if the opinion would be specifically about GAAP compliance or something broader. Hmm, I'll have to review my notes on single audits again.

Mabel 12 months ago

Okay, let me think this through step-by-step. The single audit report is focused on the financial statements, so the opinion would be related to that. GAAP is the standard for financial reporting, so that makes sense. I'm leaning towards B as the best answer.

Dortha 12 months ago

Hmm, I'm a little unsure about this one. I know the single audit report covers the financial statements, but I can't quite remember if the opinion is specifically about GAAP compliance or something else. I'll have to think this through carefully.

Brynn 1 year ago

This looks like a straightforward question about the opinion or disclaimer in a single audit report. I'm pretty confident I know the answer, which is B - fairly presented in accordance with GAAP.

Buffy 1 year ago

Honestly, I'm just hoping the exam doesn't ask me to do any actual auditing. That's way too much work!

Mignon 1 year ago

↳ replying to Buffy

A) free from fraud.

Tamra 1 year ago

Yeah, I remember now, it's definitely GAAP for financial statements.

Lucille 1 year ago

Option D? Really? Who even uses the GAO these days? B is where it's at, folks.

Cecily 1 year ago

↳ replying to Lucille

I agree, option B is the way to go.

Elliott 1 year ago

I don't think it's GASB, because that's for government entities.

Idella 1 year ago

Hmm, GASB, huh? Sounds like a fancy government thing. I'll go with C just to be safe.

France 1 year ago

↳ replying to Idella

So, it makes sense that the financial statements should be fairly presented in accordance with GASB.

Elvera 1 year ago

↳ replying to Idella

Yeah, that's right. It sets the accounting standards for state and local governments.

Annalee 1 year ago

↳ replying to Idella

I think GASB stands for Governmental Accounting Standards Board.

Oliva 1 year ago

I'm not sure, but I think it might be C) fairly presented in accordance with GASB.

Agustin 1 year ago

Option B seems like the way to go. Gotta stick with that GAAP, you know?

Albert 1 year ago

↳ replying to Agustin

Yes, sticking with GAAP is important for accurate financial reporting.

Hubert 1 year ago

↳ replying to Agustin

I agree, GAAP is the standard we should follow.

Tamra 1 year ago

I agree with Elliott, because GAAP is the standard for financial reporting.

Elliott 1 year ago

I think the answer is B) fairly presented in accordance with GAAP.

AGA GFMC Exam - Topic 5 Question 2 Discussion