GFMC Test Braindumps: Examination 3: Governmental Financial Management and Control (GFMC) & GFMC Exam Guide & GFMC Study Guide

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AGA GFMC Exam Syllabus Topics:

Topic	Details
Topic 1	Performance Measurement Metrics Service Efforts and Accomplishments: This section of the exam measures the ability of program managers and strategic planners to align performance indicators with organizational outcomes. It covers the integration of financial and non-financial metrics with strategic goals, the importance of transparency and accountability, and how performance data informs budgetary decisions. Candidates must understand stakeholder engagement, baseline setting, legal compliance, and benchmark creation.
Topic 2	Financial and Managerial Analysis Techniques: This section of the exam measures the skills of budget analysts and financial managers in using quantitative tools and data to assess financial decisions. It includes techniques like trend and ratio analysis, forecasting, regression, and data analytics. It also tests understanding of data sources, reliability, and how forensic auditing can be used for deeper insight into financial activities.
Topic 3	Auditing: This section of the exam measures the auditing knowledge of financial controllers and government auditors. It focuses on audit standards, types of audits, the audit process, and the responsibilities of both auditors and auditees. Key topics include audit preparation, follow-up, independence, materiality, and the scope of the Single Audit Act. Candidates are also expected to be familiar with fieldwork, reporting, and confidentiality concerns relevant to public sector audits.
Topic 4	Internal Control: This section of the exam measures the capabilities of compliance officers and internal auditors in implementing and evaluating internal control systems. It includes knowledge of COSO frameworks, OMB standards, and audit procedures aimed at fraud prevention and legal compliance. Candidates must understand roles and responsibilities related to internal control, risk assessment, reporting mechanisms, and enterprise risk management frameworks.
Topic 5	Financial Management Functions: This section of the exam measures the competencies of public sector finance officers and treasury analysts in managing financial operations in government environments. It covers essential areas such as cash flow practices, investment strategy, debt recovery, and procurement processes. Candidates are expected to understand property and inventory systems, evaluate IT-based financial systems, and apply emerging technologies. Shared services and project management principles are also included as foundational knowledge areas.

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AGA GFMC Accurate Answers - GFMC Exam Objectives Pdf

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AGA Examination 3: Governmental Financial Management and Control (GFMC) Sample Questions (Q112-Q117):

NEW QUESTION # 112
Who is responsible for resolving single audit findings?

A. the awarding agency
B. the recipient agency
C. the audit committee
D. the external auditors

Answer: B

Explanation:
* Responsibilities in Resolving Single Audit Findings:
* Single audits assess compliance with federal program requirements.
* Findings often highlight deficiencies or noncompliance issues that must be resolved by the entity receiving the federal funds.
* Explanation of Answer Choices:
* A. Awarding agency: The agency provides oversight and guidance but does not directly resolve findings.
* B. Recipient agency: Correct. The entity receiving the funds is responsible for addressing and resolving findings to comply with federal regulations.
* C. Audit committee: May oversee the process but doesn't take direct responsibility for resolving findings.
* D. External auditors: Identify the findings but do not resolve them.
:
Uniform Guidance (2 CFR Part 200),Single Audit Requirements.
Association of Government Accountants (AGA),Government Auditing Standards.

NEW QUESTION # 113
In an internal control evaluation, what are the roles of management and the auditor regarding the risk of fraud, waste and abuse?

A. Both management and auditors determine risk tolerance levels.
B. Management mitigates risks, auditors monitor compliance with controls.
C. Auditors identify risks, management implements control measures.
D. Management identifies risks, auditors assess control effectiveness.

Answer: D

Explanation:
Role of Management in Internal Control Evaluation:
* Responsibility for Risk Identification:Management has the primary responsibility for designing, implementing, and maintaining an effective system of internal controls. As part of this process, management identifies the risks related to fraud, waste, and abuse that could impact financial reporting or operational efficiency.
* Mitigating Risks:Once risks are identified, management is responsible for mitigating them by developing appropriate policies, procedures, and controls.
Role of the Auditor in Internal Control Evaluation:
* Assessing Control Effectiveness:Auditors are not responsible for designing or implementing controls; rather, their role is to evaluate whether the controls put in place by management are effective. They do this through testing, observation, and other audit procedures.
* Fraud Risk Assessment:As part of their duties under Generally Accepted Government Auditing Standards (GAGAS), auditors must assess the risk of material misstatement due to fraud and evaluate how management's controls address those risks.
Why Other Options Are Incorrect:
* B.Auditors do not identify risks-this is management's job. Auditors evaluate and assess the controls already in place.
* C.Determining risk tolerance is a governance and management responsibility, not the joint responsibility of auditors and management.
* D.Management mitigates risks, but auditors don't monitor compliance with controls-they test and evaluate the controls as part of their audit procedures.
References and Documents:
* GAGAS (Yellow Book) by GAO:Emphasizes management's responsibility for risk identification and the auditor's responsibility for assessing control effectiveness.
* COSO Internal Control Framework (2013):Highlights management's responsibility for risk assessment and control design, while auditors provide independent assurance.

NEW QUESTION # 114
Who holds primary responsibility for establishing internal controls?

A. audit committee
B. ccountants
C. management
D. internal auditors

Answer: C

Explanation:
* Responsibility for Internal Controls:
* Managementholds the primary responsibility for establishing, implementing, and maintaining an organization's internal control system.
* This responsibility is outlined in frameworks such as COSO'sInternal Control - Integrated Frameworkand the GAO'sGreen Book.
* Roles of Other Parties:
* A. Accountants: While accountants may assist in designing or assessing controls, they are not primarily responsible.
* B. Internal auditors: Their role is to evaluate the effectiveness of controls, not establish them.
* D. Audit committee: Provides oversight but does not implement or design controls.
:
COSO,Internal Control - Integrated Framework.
GAO,Standards for Internal Control in the Federal Government (Green Book).

NEW QUESTION # 115
Which of the following is an example of an internal control weakness?

A. The contract department staff awards contracts and maintains a database for vendor information.
B. The accounting department has one clerk prepare vendor payments and another clerk reconcile bank accounts.
C. Management policy allows project managers to oversee controls of companies in which they have a material interest.
D. The budget department staff is responsible for preparing the budget and for reporting on budget cost variances.

Answer: C

Explanation:
* Definition of Internal Control Weakness:Internal control weaknesses occur when controls fail to prevent or detect errors, fraud, or conflicts of interest. Allowing project managers to oversee companies in which they have a material interest introduces aconflict of interest, undermining internal controls.
* Explanation of Answer Choices:
* A. The contract department staff awards contracts and maintains a database for vendor information: While not ideal, this does not automatically signal a critical control weakness.
* B. Management policy allows project managers to oversee controls of companies in which they have a material interest: Correct. This represents a serious conflict of interest and lack of independence.
* C. The budget department staff is responsible for preparing the budget and for reporting on budget cost variances: This may indicate concentration of duties but is less severe than a direct conflict of interest.
* D. The accounting department has one clerk prepare vendor payments and another clerk reconcile bank accounts: This demonstrates good segregation of duties, not a weakness.
:
COSO,Internal Control - Integrated Framework.
GAO,Standards for Internal Control in the Federal Government (Green Book).

NEW QUESTION # 116
An evaluation of anggntity's single year financial statements would use which of the following analyses?

A. horizontal
B. trend
C. comparative
D. vertical

Answer: D

Explanation:
What Is Vertical Analysis?
* Vertical Analysisevaluates a single year's financial statements by expressing each line item as a percentage of a base amount. For example, in an income statement, each expense may be presented as a percentage of total revenue.
* This approach helps users understand the relative size of each financial statement item within the context of the total.
Why Is Vertical Analysis Used for a Single Year?
* Vertical analysis focuses solely on relationships within a single set of financial statements, making it the appropriate choice for single-year evaluations.
Why Other Options Are Incorrect:
* A. Comparative:Involves comparing financial data across entities or periods, not within a single year.
* B. Horizontal:Focuses on changes in financial data over time (year-to-year comparisons).
* C. Trend:Examines patterns over multiple periods to identify long-term trends, not a single year.
References and Documents:
* GAO Financial Audit Manual:Recommends vertical analysis for single-year financial statement evaluations.
* AICPA Financial Statement Analysis Guide:Provides detailed examples of vertical analysis techniques.

NEW QUESTION # 117
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