AGA Updated GFMC Exam Questions and Answers by reina

Governmental Attestation Engagements:

These engagements involve providing assurance on specific elements of financial or non-financial information, such as compliance with laws, contracts, or bond covenants.

Reviewing revenue coverage requirements for outstanding bonds fits the scope of attestation engagements, which focus on confirming adherence to specific requirements.

Explanation of Answer Choices:

A. Monitor a subgrantee for compliance to the grant restrictions: Monitoring is a management responsibility, not typically part of an attestation engagement.

B. Establish a policy concerning fraud prevention: Establishing policies is a management duty, not a task for auditors.

C. Monitor purchasing card charges for compliance with travel policies: Monitoring is operational, not attestation-related.

D. Review the revenue coverage requirements on outstanding bonds: Correct. This falls within the scope of attestation engagements.

 What Is an Outcome Measure?

Anoutcome measureevaluates the results or impacts of a program or service, focusing on whether objectives were achieved (e.g., efficiency, effectiveness, or quality).

Percentage of disaster claims paid on timedirectly reflects the program’s ability to meet its goal of providing timely financial assistance to disaster victims, making it an outcome measure.

 Why Other Options Are Incorrect:

A. Amount of disability inquiries received during a pandemic:This is aninput measure, as it reflects the demand or workload, not the results.

B. Total environmental impact statements reviewed:This is anoutput measure, showing the quantity of work done, not the effectiveness or result.

C. Number of federal capital territory students that graduated:While this measures results, it reflects an output rather than an outcome (it doesn’t assess the quality or long-term impact of education).

 References and Documents:

Government Performance and Results Act (GPRA):Emphasizes the use of outcome measures to evaluate program performance.

GAO Performance Measurement Guide:Defines and provides examples of outcome, output, and input measures.

Creditworthiness and Loan Approval:

When creditworthiness is a criterion for government loans, the applicant must demonstrate asatisfactory history of repaying debt, as this reflects their ability to fulfill repayment obligations in the future.

 Why a Satisfactory History Is Required:

Past repayment behavior is considered the best indicator of future performance. Government agencies prioritize reducing the risk of defaults by ensuring applicants have a proven history of managing debt responsibly.

 Why Other Options Are Incorrect:

A. A credit rating from a major bank:While a credit rating is helpful, it is not typically required for government loans. Instead, creditworthiness is evaluated based on repayment history and other financial factors.

C. Sufficient capitalization:This is important for business loans, but it does not address creditworthiness.

D. A promise to pay interest at the government borrowing rate:A promise is not sufficient to establish creditworthiness.

 References and Documents:

OMB Circular A-129:Requires agencies to assess creditworthiness before granting loans.

GAO Loan Management Guide:Highlights repayment history as a key criterion for loan approval.