AGA GFMC Exam - Topic 5 Question 2 Discussion

Actual exam question for AGA's GFMC exam

Question #: 2
Topic #: 5

[All GFMC Questions]

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.

Show Suggested Answer

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).

by Brinda at Jul 14, 2025, 03:01 AM

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Avery

2 months ago

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

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Nada

2 months ago

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

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Amie

3 months ago

Wait, are we sure it’s not C?

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Ira

3 months ago

I agree, B is the right choice.

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Kristine

3 months ago

Definitely B, GAAP is the standard!

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India

3 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!

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Elmira

4 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.

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Corinne

4 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.

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Freeman

4 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.

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Muriel

4 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.

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Mabel

4 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.

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Dortha

4 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.

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Brynn

5 months 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.

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