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AGA Certified Government Financial Manager (CGFM) Sample Questions (Q21-Q26):
NEW QUESTION # 21
In Government Organizations, a modified approach for depreciation is used. This modified approach expenses maintenance cost and capitalizes additions and improvements, but it does not record depreciation charges. The logic behind the modified approach is:
Answer: A
NEW QUESTION # 22
Life cycle costing results in overall cost.
Answer: B
NEW QUESTION # 23
Four types of credit enhancements are offered by state bond banks. Which of the following is NOT out of those enhancements?
Answer: D
NEW QUESTION # 24
A variable that would influence management's decision to hire contractors to perform management control evaluations is
Answer: D
Explanation:
Why Hire Contractors for Management Control Evaluations?Management may decide to bring in external contractors when there are gaps in the organization's capacity to perform evaluations internally. One key factor is thelack of management expertise-if management lacks the necessary knowledge or experience to evaluate controls effectively, it may outsource this task to qualified contractors.
Why Other Options Are Incorrect:
* B. Availability of Qualified Contractors:While availability is a factor, it's not a variable that influences the decision to outsource. Instead, it's a logistical consideration once the decision has been made.
* C. Suspicion of Internal Fraud:Suspicion of fraud may lead to investigations, but hiring contractors to evaluate controls is driven by expertise gaps rather than fraud concerns.
* D. Knowledge of Systemic Deficiencies:If management already has knowledge of systemic deficiencies, they may focus on remediation rather than outsourcing evaluations.
References and Documents:
* GAO Standards for Internal Control in the Federal Government (Green Book):Emphasizes the need for knowledgeable personnel to evaluate controls.
* GAGAS (Yellow Book):Highlights the role of external expertise in cases where internal expertise is insufficient.
NEW QUESTION # 25
Which of the following is NOT included in RFPs (Request for proposals) regarding audit?
Answer: A
NEW QUESTION # 26
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