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CGFM Test 3 (2)
Terms in this set (118)
A measure to monitor a credit program. Indicates the volume of activity performed. Ex: # of loans outstanding, $ of loans outstanding, volume of loans generated during the past year, quarter or month...
A measure to monitor a credit program. Indicates the extent to which the program is achieving the intended results and the effectiveness of different collection techniques. Ex: % of enrollment increase per million dollars of student loans, # of jobs created per million dollars of small business loans
A measure to monitor a credit program. Indicates the quantity and quality of the loans made and retained. Ex: # of delinquent accounts, $ amount of delinquent accounts
A measure to monitor a credit program. Indicators of the cost per unit of various operations, including the various collection techniques. Ex: Cost per Loan processed, cost per dollar collected...
Request for Qualification (RFQ)
Used to pre-qualify vendors, based on factors like level of experience to perform types of services, background of employed staff, previous work, financial capacity. This allows the government to limit the proposal it has to look at.
Blanket Purchase Agreement
Individual govts. or agencies may enter bulk purchases for specific items needed for a specified period of time. Components then issue Purchase Orders against the contract.
Small Purchase Procedures
Laws or regulations may define small purchases as up to $10k as representing small purchases. Auditors should be wary to circumvent the dollar amounts by splitting up large orders into several small ones.
Fixed Price Contract
Contracts in which prices are not subject to adjustment, regardless of the contractor's cost experience
Cost Reimbursable Contract
payment of allowable costs incurred to the extent specified in the contract
Cost plus fixed fee
Type of Cost Reimbursable Contract. Contractor receives allowable costs plus a fixed amount of fee specified in the contract.
Cost plus Incentive Fee
Type of Cost Reimbursable Contract. Contractor receives allowable costs plus a fee that varies inversely with the amount of cost incurred
Cost with no Fee
Type of Cost Reimbursable Contract. Contractor is reimbursed for only allowable costs (typical with universities, non-profit, and R&D contracts)
Cost Sharing Contract
Type of Cost Reimbursable Contract. Contractor and government share the costs and the contractor receives no fees
Time and Materials Contract
Type of Cost Reimbursable Contract. Contractor receives flat rate per hour or day for labor, plus the costs of materials. Risky for government because the contractor has no incentive to keep the number of hours down.
Leased or owned and includes land, land rights and anything else attached to the land (except natural resources), buildings and infrastructure
Equipment, furniture, fixtures, supplies, hardware, software. It can include intellectual property like copyrights, bonds, stocks...
Tangible property that is held for sale or in the process of production for sale or in the process of production for sale, or to e consumed in the production of goods for sale or in the provision of services for a fee
Assets that are not used to support the provision of goods or services. These are held b/c of historical, natural, cultural, educational or artistic significance and the goal is to retain them for the enjoyment of current and future generations. Ex: US Capitol, White House etc...
Inventory Turnover Ratio
The # of times the inventory turns over in a period of time provides a measure of how quickly the inventory is moving through the system during a specific period of time
Periodic User Surveys
Provide independent perspective on the effectiveness of the inventory management function. Questions could be raised about timeliness and quality of service, impact of supply breakdowns...
Sampling of real world facts and figures to generate data that can be manipulated by a computer
Encompasses the people, processes and technology required to create a consistent, enterprise wide view of an organization's data
Comprises all the disciplines related to managing data as a valuable resource
Process of automation and transformation of both real time and offline data from one format to another
This is seen to be the ultimate data visualization tool and its also letting the user know what is not working correctly
Steps and procedures that govern how resources are used to create products and services to meet the needs of customers and markets
Enterprise Resource Planning
These are common databases maintained by a database management system to share information and resources across the entire enterprise
Controls that will assure the complete and accurate processing of data, from input through output, and may help to ensure the privacy and security of data transmitted between applications
Physical Security Controls
Ensure the physical and cyber security of IT from individuals and groups and from environmental risks
Controls that ensure all users are uniquely and irrefutably identified
Ensure that only approved users have access to the application system
Ensure integrity of data fed from upstream sources into the application system
only valid data are input and processed; including duplicate entries. in controls section
Ensure that all records were processed from initiation to completion
Test for values outside the designated range; dates outside valid time periods or in an illogical sequence, or extremely high values associated within certain geographical regions
Provide an authentication mechanism in the application system
Ensure data are scientifically and mathematically correct based on inputs and outputs
The Federal Financial Management Improvement Act
Requires that each government CFOs agency comply with the federal financial management systems requirements, follow applicable accounting standards, and use the US Standard General Ledger at the transaction level. Requires the head of each agency to assure the President and Congress annually that the agency's financial system meets the Act's objectives.
Benefits the people who have received services in the past, as well as those who are currently receiving services and will receive services in the future
Benefits the people who will be receiving services in the future
Benefits the people receiving services currently
Uses a variety of techniques from stats, modeling, machine learning n data mining that analyze current historical facts to make predictions about the future, or otherwise known events.
This is done when comparing our numbers to a similar agency or entity or with a benchmark
Common Size Statements
Converts all data elements in a statement into a percentage to see if there has been any large changes to any of the accounts
Per Capita Elements
calculated by dividing a particular data element by the entity's population
These ratios are used to determine an entity's ability to meet its creditors demands
Asset Efficiency Ratios
Shows the efficiency of entity to be able to use its assets and convert it into cash
Efficiency in managing inventory is determined by the speed with which the inventory moves in and out of an entity, which is called inventory turnover. If inventory moves quickly then there is lower carrying costs (storage, cost of capital, spoilage....)
Operating Results and Budgetary Cushion Ratios
These types of ratios help to determine if the entity's revenues are sufficient to cover its costs
Budget and Accounting Procedures Act of 1950
Requires each federal agency head to establish and maintain internal controls
Federal Managers Financial Integrity Act of 1982 (FMFIA)
Requires GAO to prescribe standards of internal controls and the director of OMB to establish guidelines for the evaluation by agencies of their systems of internal controls. Agency heads have to evaluate these controls annually
Sarbanes-Oxley Act of 2002
In the annual report provided companies an assessment of the effectiveness of internal controls for financial reporting. It also requires auditors to attest to and report on the management's assessment
CFO Act of 1990
Requires CFO to develop and maintain an integrated agency accounting and financial management system
Government Management Reform Act of 1994
Expanded the amount of agencies that had to have audited financial statements as well as for the executive branch of the government
Federal Financial Management Improvement Act of 1996
Requires agencies to follow Federal Accounting Standards, financial management system requirements and the Treasury Standard general ledgers at the transaction level .
Accountability of Tax Dollars Act
Expanded the requirement of an annual audit of virtually every financial agency
OMB Circular A-123
Management's responsibility for internal controls
OMB Circular A-130
Management of Federal Information Resources. Minimum set of controls in federal automated information security programs and links these controls with agency internal controls system
Committee of Sponsoring Organizations
COSO developed a commonly used internal controls framework
government book about controls
COSO objective. The effectiveness and efficiency of the organizations operations
COSO objective. Internal and external reports, both financial and non-financial. They may encompass reliability, timeliness, and transparency.
COSO objective. Adherence with laws and regulations to which the organization is subject.
Actual procedures that organizations establish to help ensure they accomplish their goals and avoid what they want to avoid
General Controls (IT)
This category includes entity wide security planning, management control over data center operations, system software acquisition and maintenance, access security and application system development and maintenance.
Application Control (IT)
This control is designed to ensure the completeness, accuracy and authorization, and validity of all transactions during the application process and to make sure that all inputs are received/valid and that outputs are correct and properly distributed.
COSO Definition of ERM
This is a process, affected by an entity's board of directors, management and other personnel, applied in both strategy setting and across the entity designed to identify potential events that may affect the entity, to manage risks, and to provide reasonable assurance regarding the achievement of entity objectives.
acceptable level of variation in performance relative to achievement of objectives
Broad based amount of risk an entity is willing to accept in pursuit of its mission/values
Component of ERM. Identical to the control environment component in the previous framework
Component of ERM. process for clearly setting out the organization's objectives (its misson). Risks to the organization relate to the possibility of not achieving objectives.
Component of ERM. Determines which events, either internal or external, will potentially impact the organizations objectives either positively (opportunities) or negatively (risks).
Component of ERM. Considers the likelihood and the impact of risks identified in the prior step and a determination of how they will be managed.
Component of ERM. Involves avoiding activities that create risks, reducing the risk by installing additional controls, sharing the risk or accepting the risk.
Chief Internal Auditor
This person supports the overall objectives of the organization. Audit work fulfills the general purpose and responsibilities approved by management. Resources of the audit function are efficiently and effectively employed. Audit work conforms to professional standards.
Related to Performance Improvement. Means fewest, yet appropriate level of resources
Related to Performance Improvement. Means using the least amount of resources relative to the amount of goods or services produced and particularly at a specified level of quality.
Related to Performance Improvement. Refers to achieving desired outcomes
Related to Performance Improvement. Means constituents have a full and fair opportunity to obtain the goods and services.
Related to Performance Management. Input measures, identify the amounts of resources used to provide a service, good or program.
Related to Performance Management. Measures of the amount of services or goods provided or produced. Measures accomplishment in a physical sense, but DO NOT measure results achieved or the impact of those accomplishments on the community.
Related to Performance Management. Measures of the results associated with the outputs or other provision of services or goods.
GPRA Modernization Act
Established the COO and Performance Improvement officer (PIO). COO's goal is to work with goal leaders who are responsible for improving the agency's management and performance. PIO is to help the COO accomplish that mission.
Independent, systematic, objective, unbiased assessment that provides answers to a set of questions.
Were the financial statements fairly presented
Type of Audit. Was this organization operating in an economical manner?Did this organization achieve its program objective?Did the costs claimed under a federal grant program conform to the grant requirements? Was the program operated in compliance with laws and regulations?
In this context means whether reasonable people would consider that an omission or misstatement would have changed their opinion regarding the auditor's conclusion.
Concern examining, reviewing, or performing agreed upon procedures on a subject matter or an assertion about a subject matter that is the responsibility of another party.
Type of Attestation Engagement. Auditors obtain sufficient, appropriate evidence to express an opinion that the subject matter is in conformity with the standard criteria and the assertion is fairly stated in all material respects, based on the criteria.
Type of Attestation Engagement. Auditors perform sufficient testing to express a conclusion about whether any info came to their attention on the basis of the work performed that indicates the subject matter is not in conformity with criteria or the assertion is not fairly stated in all material respects based on the criteria.
Agreed Upon Procedure Engagement
Type of Attestation Engagement. Auditors perform specific procedures on a subject matter. In the case of a agreed upon procedures engagements, the auditor and client agree on the tests to be performed and the criteria to test against.
audits that provide findings or conclusions based on an evaluation of sufficient, appropriate evidence against criteria.
Public Company Accounting Oversight Board (PCAOB)
Oversees audits of companies that are publicly traded. Standards apply to registered accounting firms that prepare and issue audit reports of public companies.
Professional requirements of GAGAS. Auditors and audit organizations are required to comply with an unconditional requirement in all cases in which the circumstances exist to which the unconditional requirement applies. GAGAS use the words must or is required to specify an unconditional requirement.
Presumptively Mandatory Requirements
Professional requirements of GAGAS. Auditors and audit organizations are required to comply with a presumptively mandatory requirement in all cases in which the circumstances exist to which the presumptively mandatory requirement applies. You can depart from this requirement in rare cases but you have to justify decision and why your alternative way accomplished the same goal as the presumptive requirement. GAGAS uses the word should for presumptively mandatory requirements.
Professional requirements of GAGAS. Text within GAGAS other than the requirements using words like may, might and could to describe explanatory info and is included to provide further explanations and guidance on professional requirements or identify and describe other procedures or actions relating to auditors' or audit organizations activities.
The most important audit standard, if people don't believe that the auditor is impartial then people will not believe in the audit work. The concept of independence covers both the actual attitude of the auditor and the way he or she would be perceived by knowledgeable 3rd party. The requirement for independence covers both the period of the engagement and the period covered by the audit
A threat to Independence. Financial or other interest will inappropriately influence an auditor's judgment
A threat to independence. Previous non-audit services that the auditor provided will affect the auditor's judgement
A threat to independence. auditor will not be objective b/c of political, ideological, social or other convictions.
A threat to independence. Close, long-standing relationship or family relationship affect the auditor's judgement.
A threat to independence. External pressures will impact the auditor's judgement.
A threat to independence. Auditor takes on the role of management within the organization.
A threat to independence. Audit organization placement within the organization will impact the ability to audit and report objectively.
Requires a mindset in which auditors assume neither that management is dishonest nor that it is of unquestionable honesty
Additional GAGAS requirement for a financial audit. Auditors should be communicating with legislative committees as well as should communicate with their clients. Auditors should tell legislative communities of nature of planned work and level of assurance to be provided, auditors' responsibility for detecting fraud, and any potential restrictions on the auditor's reports.
Consider Results of Prior Reviews
Additional GAGAS requirement for a financial audit. Auditors should see if audited entity has taken appropriate corrective actions to address findings and recommendations from preivous reviews that could have a material effect on financial statements or other financial data significant to audit objective
Look for Compliance Violations and Abuse
Additional GAGAS requirement for a financial audit. Auditors should design tests to provide reasonable assurance of detecting violations of grant or contractual provisions if noncompliance could have a direct and material effect on FS or financial data significant to the audit
Elements of a Finding
Additional GAGAS requirement for a financial audit. When auditors detect a finding the auditors should plan the audit to develop the elements of a finding: condition, criteria, cause and effect.
Additional GAGAS requirement for a financial audit. GAGAS requires auditors to document evidence of supervisory review of work performed that support findings, conclusions and recommendations. Yellow Book requires auditors to document departures from GAGAS requirements and the impact of those departures
Financial Statements are presented fairly
Provide description of the matter giving rise to the modification when auditor concludes that Financial Statements are not presented fairly or the auditor cannot get sufficient audit evidence to conclude on a fair presentation
A deficiency, or combination of deficiencies, in internal controls so that there is a reasonable probability that a material misstatement of the entity's financial statements will no be prevented or detected and corrected on a timely basis
A deficiency or combination of deficiencies, in internal controls that is less significant than a material weakness, yet important to merit the attention of governance
Auditor's should obtain reasonable assurance that the evidence they obtain is sufficient and appropriate to support the findings and conclusions. Auditors use professional judgement to determine if they have this.
Helps auditors determine throughout performance audit, including when deciding the type and extent of audit work to perform, when evaluating results of the audit work, and when developing the report and related findings and conclusions. Significance is defined as the relative importance of a matter within the context in which it is being considered, including quantitative and qualitative factors
Possibility that auditor's findings, conclusions and recommendations, or assurance may be improper or incomplete, as a result of factors such as evidence is not sufficient and/or appropriate, an inadequate audit process or intentional omission or misleading info due to misrepresentation or fraud. Audit risk involves both qualitative and quantitative factors.
A fieldwork standard for performance audits. Auditors must adequately plan and document the planning of the work necessary to address the audit objectives. Auditors should define the objective of the audit, the scope and methodology to achieve those objective. Performance audits require more analysis than financial audits to determine the objectives. Significance of the program or program components should impact the audit objectives, as should the potential use of the audit results.
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