A CPA Has Conducted an Audit of the Financial Statements

question 23

Multiple Choice

A CPA has conducted an audit of the financial statements of an entity that received federal financial assistance and had one program that qualified as a major program. The CPA's responsibility related to reporting on internal control for this entity is to:

• A) Issue a report on internal control relating to the financial statements.
• B) Issue an opinion on internal control relating to the financial statements.
• C) Issue a report on internal control relating to the financial statements and a report on internal control related to the federal program(s).
• D) Issue a report on internal control relating to the financial statements and an opinion on internal control related to the major program.

---

Definitions:

Internal Consistency

A method of determining reliability of an instrument by looking within the test itself, or not going “outside of the test” to determine a reliability estimate as is done with test-retest or parallel forms reliability. Some types of internal consistency reliability include split-half (or odd-even), Cronbach’s Coefficient Alpha, and Kuder-Richardson.

Licensure Exam

A standardized test that individuals must pass to obtain a license to practice in certain professions, ensuring they meet the required competency standards.

Median

The middle value in a data set when the values are arranged in ascending or descending order.

Range

The simplest measure of variability is the range, which is calculated by subtracting the lowest score from the highest score and adding 1.