Appendix 7: Answers to Reinforcement Quizzes
Answers to Reinforcement Quiz ñ Section III, Chapter 1
1. Which law first required audited financial statements from the largest
federal agencies?
a.
Federal Financial Management Improvement Act
b.
Federal Managersí Financial Integrity Act
c.
Chief Financial Officers Act of 1990, as expanded by the
Government Management Reform Act
d.
OMB Circular A-123
Answer: (c). The CFO Act was the first time that federal agencies were
required to produce audited financial statements. The CFO Act required
audited financial statements from the largest agencies, but that
requirement has now been extended by other laws to all federal
agencies that receive annual budgetary authority of $25 million or more.
2. Which federal agencies must have annual financial statements?
a. the 15 cabinet agencies
b. all agencies with more than $100 million in annual budgetary
authority
c. virtually all federal agencies
d. none of the above
Answer: (c). Initially, only the largest federal agencies were required to
have annual financial statements. However, the Accountability for Tax
Dollars Act of 2002 extended the requirement for annual financial
statements to virtually all federal agencies.
3. The term ìmanagement controlsî:
a. is considered synonymous with internal controls.
b. refers to human relations activities only.
c. relates only to private industry, not governmental agencies.
d. is specifically related to the Foreign Corrupt Practices Act of 1977.
Answer: (a). Management controls is used interchangeably with
internal controls.
4. Internal controls are relevant to the work environment, not to the home
environment. True or false? Explain.
Answer: False. We use internal controls all of the time at home. We
safeguard the passwords we use to log onto the Internet, we reconcile
our bank statements and we set aside homework time for our children.
These are all internal controls to achieve our objectives.
Online version, for personal use only
AGA Study Guide 3, 2016 Edition

Appendix 7: Answers to Reinforcement Quizzes
5. Which OMB Circular defines management's responsibility for internal
control in federal agencies?
Answer: OMB Circular A-123 defines management's responsibility for
internal control in federal agencies.
Online version, for personal use only AGA Study Guide 3, 2016 Edition

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AGA CGFM Study Guide 3: Governmental Financial Management and Control