Under a Single Audit

question 32

Multiple Choice

Under a single audit:

• A) An annual audit must be performed encompassing the nonfederal entity's financial statements and schedule of expenditures of federal awards.
• B) The audit must be conducted by an independent auditor in accordance with generally accepted government auditing standards (GAGAS) and cover the operations of the entire nonfederal entity.
• C) For each major program, the auditor must obtain an understanding of the internal controls pertaining to the compliance requirements for the program, assess control risk, and perform tests of controls, unless the controls are deemed to be ineffective.
• D) All of the above statements regarding a single audit are true.

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Definitions:

Unique Risk

Referred to as unsystematic risk, it denotes the risk linked to a particular company or sector.

Firm-specific Risk

Risk associated with an individual company, as opposed to the market as a whole.

Efficient Frontier

A graphical representation in portfolio management that shows the best possible investment portfolios that offer the highest expected return for a given level of risk.

Risky Assets

Assets that have a higher degree of uncertainty in their returns, often with the potential for higher gains but also higher losses.