Question

In reporting under Government Auditing Standards, an auditor most likely would be required to communicate management’s misappropriation of assets directly to a federal inspector general when the fraudulent activities are

Accompanied by fraudulent financial reporting that results in material misstatements of asset balances.

Reported to the entity’s governing body and the governing body fails to make a required report to the federal inspector general.

Concealed by management by circumventing specific internal controls designed to safeguard those assets.

Perpetrated by several levels of management in a scheme that is likely to continue in future years.

Although the scope of audits of recipients of federal awards in accordance with federal audit regulations varies, audits under the Single Audit Act generally have which of the following elements in common?

The auditor should obtain written management representations that the recipient’s internal auditors will report their findings objectively, without fear of political repercussion.

The auditor is required to express both positive and negative assurance that fraudulent acts that could have a material effect on the recipient’s financial statements are disclosed to the inspector general.

The auditor is to determine whether the federal financial assistance has been administered in accordance with applicable laws and regulations.

The materiality levels are lower and are determined by the government entities that provided the federal awards to the recipient.

Answer 1

1) Reported to the entity’s governing body and the governing body fails to make a required report to the federal inspector general. because auditors are not responsible for or reporting fraud or noncompliance with laws and regulations to a party other than the entity's senior managemen

2) The auditor is to determine whether the federal financial assistance has been administered in accordance with applicable laws and regulations.

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