Exam Three—Governmental Financial Management and Control
115 questions
Two Hours and 15 minutes
1. Internal Controls (25%)
A. Demonstrate an
understanding of Internal Control including:
1. The objectives
of internal control.
2. The components of internal control (i.e., control
environment, risk assessment, control activities,
information and communication, monitoring).
3. The concept of cost-benefit.
4. The concepts related to internal control weaknesses.
B. Demonstrate an
understanding of the Application of Internal Control to:
1. Operations,
including information technology.
2. Financial reporting.
3. Compliance.
C. Demonstrate an
understanding of Internal Control Responsibilities including:
1. Management's
responsibility to establish, monitor, remediate and report on internal
controls.
2. The auditor's responsibility regarding internal controls.
3. Management's responsibility for detecting and reporting
indications of fraud.
D. Demonstrate an
understanding of the Evaluation Process including:
1. The process
for documenting and assessing internal controls
2. The roles of management and the auditor in the
evaluations of internal control including the risk of
fraud.
E. Demonstrate an
understanding of the Reporting Process including:
1. How management
reports on internal control, including the use of various types of
assertions.
2. The auditor's reporting on internal control.
2. Internal and External
Auditing (25%)
A. Demonstrate an
understanding of Audits including:
1. Types of
auditors (e.g., independent external auditor, independent internal
auditor, internal auditor). 2. Objectives of financial
statement audits.
3. Objectives of performance audits.
4. Objectives of attestation engagements.
5. Uses of audit reports.
6. The concept of materiality.
B. Demonstrate an
understanding of Standards including:
1. The sources of
auditing standards for audits of government organizations.
2. The interrelationships among various standard setting
organizations (Government Accountability
Office, AICPA Auditing Standards Board, and the Public Company
Accounting Oversight Board
[PCAOB]).
3. The concept of general standards.
4. Field work standards for financial audits.
5. Field work standards for performance audits.
6. Reporting standards for financial audits.
7. Reporting standards for performance audits.
8. The concept of auditor independence and the impact of
non-audit professional services on
independence.
9. The responsibilities of the auditor in implementing an
audit follow-up program.
10. The types
of activities that are considered sensitive in a government audit (e.g.,
taxpayer
information, payments to informers, travel and entertainment).
C. Demonstrate an
understanding of the responsibilities of the Auditee including tasks
related to:
1. Preparation
for an audit.
2. Supporting the audit process.
3. Audit follow-up.
4. Preparation of the Management Representation Letter.
5. The role of the Audit Committee
D. Demonstrate an
understanding of the components of the Single Audit Act including:
1. The scope and
purpose.
2. The required reports.
3. Demonstrate an
understanding of Performance Measurement Reporting including: (13%)
A. How performance
measures relate to the organizational goals and objectives.
B. The objectives of
financial and non-financial performance measures.
C. How financial and
non-financial performance measures are linked.
D. How financial and
non-financial performance measures are integrated with the strategic
plan and
budget.
E. The uses of performance
measurement and reporting to improve internal management.
F. The uses of performance
measurement and reporting to demonstrate public accountability.
G. The uses of performance
measurement and reporting to improve oversight and allocation of
resources.
H. The types of
performance measures (inputs, outputs, and outcomes).
I. The characteristics of
performance measurement data (e.g., relevance, understandability,
comparability,
reliability, timeliness, and verifiability).
J. Baselining and bench
marking.
K. The role of the
"customer" in the evaluation-feedback of performance.
4. Demonstrate an
understanding of Financial and Managerial Analysis Techniques
including: (7%)
A. The conduct of the
following types of analyses: present value, future value, cash flow,
pay-back,
trend, significant ratios, comparisons to competitors,
regression analysis, earned value
management, and flowcharting.
B. Identification of the
sources of information required for financial and managerial analysis
(e.g.,
accounting records, performance records, financial
statements).
C. The use of forensic
techniques, such as data mining.
D. The financial and
managerial techniques used to make competitive outsourcing decisions.
5. Financial and
Managerial Concepts, Controls and Techniques (30%)
A. Demonstrate an
understanding of Cash Management including:
1. Legislation
that affects governmental cash management.
2. Considerations in establishing banking relationships
(e.g., competition, servicing, compensating
balance).
3. Techniques for accelerating collections (e.g., EFT,
centralized collections, lockboxes).
4. Techniques for timely payment (e.g., warehousing
payments, EFT, credit cards).
5. The role and control of electronic payments (e.g., smart
cards, benefit cards, EFT).
6. Techniques used to deter, identify and correct improper
payments.
B. Demonstrate an
understanding of Investment Management including: (less weighting)
1. The components
of an investment policy (e.g., objectives [safety, liquidity, yield],
standards of care
[prudence, conflicts of interest, authorization], authorized financial
institutions, depositories and
brokers/dealers, safekeeping, authorized investment.
2. The components
of investment management (e.g., selection of money managers, role of
fiduciary/prudent experts, understanding of markets, monitoring and
evaluating performance, risk
assessment/avoidance).
C. Demonstrate an
understanding of Credit Management/Debt Collection including:
1. The components
of Credit Management (e.g., rationale, eligibility, credit worthiness,
account
servicing, debt write-off, performance measurement).
2. The components of Debt Collection (e.g., salary and
refund offsets, collection agencies,
delinquency rates, aging, write-off, reporting requirements).
D. Demonstrate an
understanding of Procurement Management including:
1. The elements
in the public procurement process (e.g., authorized procurement
officials, compiling
a bidders list, public advertising, preparing and issuing an RFP,
evaluating proposals, awarding
the contract, writing the contract).
2. Techniques for assuring full and fair competition (e.g.,
advertising, direct contact to likely vendors,
registries).
3. Evaluation selection criteria (e.g., past performance,
delivery time, price).
4. The monitoring and acceptance process to ensure that
contract specifications are met.
5. Contract efficiencies (e.g., purchase cards, bulk
purchasing, inter-agency procurements).
E. Demonstrate an
understanding of Property Management including: (less weighting)
1. The elements
of a property management system (e.g., record keeping, safeguarding,
maintenance, and reporting).
2. The procedures for property disposal (e.g., identifying
surplus, and disposition).
F. Demonstrate an
understanding of Inventory Management including:
1. The elements
of an inventory management system (e.g., policies, classifications,
controls, and
reorder decisions).
2. Ways to safeguard inventory (e.g., physical control,
tagging, periodic inventory, stewardship).
3. Inventory valuation and reporting methods.
G. Demonstrate an
understanding of Financial Management Systems including:
1. The concept of
an integrated financial management system.
2. The elements of a disciplined development process (e.g.,
requirements management, testing,
data conversion, systems interfaces, configuration management, risk
management, project
management, and quality assurance).
3. The various approaches to meeting system needs (e.g.,
off-the-shelf, cross-servicing, outsourcing,
custom design).
4. Business process re-engineering in the development and
implementation of information systems.
5. Techniques for project management (e.g., defining
interrelationships and tasks, resource
management, cost and schedule control, cost and performance measurement,
and independent
verification and validation).
6. Methods for assuring the reliability of data.