CGFM Exam 2 - Section II Accounting and Reporting for State and Local Governments 2023/2024
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Course
CGFM
Institution
CGFM
CGFM Exam 2 - Section II Accounting and Reporting for State and Local Governments 2023/2024
The reporting model for state and local governments focuses only on fiscal accountability. True or false? - ANSWER-False. The reporting model focuses on both fiscal accountability, through fund-level re...
CGFM Exam 2 - Section II Accounting
and Reporting for State and Local
Governments 2023/2024
The reporting model for state and local governments focuses only on fiscal accountability. True or false? -
ANSWER-False. The reporting model focuses on both fiscal accountability, through fund-level reporting,
and operational accountability, through government-wide reporting.
Describe how financial reporting can assist in fulfilling government's duty to be publicly accountable. -
ANSWER-Financial reporting by governments assists users in assessing accountability and assists in
making economic, social, and political decisions.
Which of the following is not a primary user of external financial reports according to the GASB?
a. the media
b. investors
c. department managers
d. city council - ANSWER-C. Department mangers are internal users of reports. GASB only considers
external users of reports in the standard-setting process.
If a preparer or auditor wants to find out how a transaction should be reported, the authoritative place
to look would be the standards and interpretations issued by the GASB. True or false? - ANSWER-True.
According to GASB 76, the first level in the hierarchy of governmental account principles is GASB
standards and interpretations.
Describe the financial reporting entity for state and local governments. - ANSWER-The financial reporting
entity consists of:
1. the primary government
2. organizations to which the primary government is financially accountable
, 3. other organizations for which the nature and significance are such that their exclusion would cause
the reporting entity's financial statements to be misleading or incomplete.
Which of the following is the most important factor in determining if a government is part of a primary
government?
a. misleading to exclude
b. services provided
c. financial accountability
d. affiliation to primary government - ANSWER-C. Financial accountability is the most important factor.
In determining component units of the primary government, legal standing is the first criterion to
consider. True or false? - ANSWER-True. The first question that needs to be addressed in determining the
status of a potential component unit is whether it is legally separate from the primary government.
Describe three ways that a primary government can impose its will over a component unit. - ANSWER-
The following are all manifestations of imposition of will:
* Ability to remove appointed members of the governing body at will
* Ability to modify or approve the budget
* Ability to modify or approve rate or fee changes
* Ability to veto, overrule or modify decisions of the unit
* Ability to appoint, hire, reassign or dismiss personnel
Which of the following is not a method of displaying component units or related organizations?
a. consolidation
b. inclusion as a fiduciary fund
c. blending
d. discrete presentation - ANSWER-A. Consolidation
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