AGA Exam GFMC Topic 5 Question 2 Discussion

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).