Question: What is the National Single Audit Sampling

> Choose the best answer. 1. State regulation of not-for-profit organizations derives from the state’s power to: a. Grant exemption from income taxes. b. Give legal life to a not-for-profit corporation. c. Grant exemption from sales taxes. d. Grant license

> Information from the Form 990 for the American Heart Association for the fiscal year ending June 30, 2007, follows. The full text of the Form 990 is available at www.americanheart.org or www.guidestar.org. Required a. Compute the following performance m

> Crossroads University is a tax-exempt, private university. An excerpt from Note 5 “Endowment Fund” of its 2007 audited financial statements is as follows: State law allows the board to appropriate investment income and as much of the net appreciation as

> What are assets limited as to use and how do they differ from restricted assets?

> For each of the following independent situations, determine whether the organization is at risk for receiving intermediate sanctions from the Internal Revenue Service for conferring excess economic benefits on disqualified persons. If so, indicate how th

> The following items are taken from the financial statements of the Kids Clubs of America for the years ending December 31, 2011, and 2010, with related notes. Required a. Explain what the term board-designated, unrestricted net assets means. What does

> The Atkins Museum recently hired a new controller. His experience with managerial accounting and strong communication skills were extremely attractive. The new controller sent each member of the Board of Trustees’ Finance Committee a se

> The balance sheet and statement of activities for the Central Area Disadvantaged Youth Center for fiscal year 2011, prepared by a volunteer accountant with business experience, are presented on the following page. Required a. Assume that you are the i

> Consider the following scenarios relating to activities that include a fund-raising appeal: 1. The Green Group’s mission is to protect the environment by increasing the portion of waste recycled by the public. The group conducts a door-to-door canvass of

> The Children’s Counseling Center was incorporated as a not-for-profit voluntary health and welfare organization 10 years ago. Its adjusted trial balance as of June 30, 2011, follows. 1. Salaries and fringe benefits were allocated to p

> Obtain the most recent audited annual financial report of the U.S. government. It is available from the Government Accountability Office (GAO). Required a. Did the U.S. Government have a surplus or deficit for this year? b. Was there an increase or decr

> How does support differ from revenues from exchange transactions? How do gains differ from revenues?

> Why is a statement of functional expenses considered an important financial statement for a voluntary health and welfare organization? How does a statement of functional expenses differ from the expense section of a statement of activities?

> What are the three categories into which NPOs must classify their net assets? Describe which net assets are included in each category. Would board-designated net assets be reported as temporarily restricted net assets? Explain your answer.

> Go to the Internet Web sites of five of the largest charitable organizations listed in Illustration 15–7 and search for financial information and performance measures they may disclose on their Web sites. Illustration 15-7 Required a

> What financial statements does FASB Statement No. 117 require NPOs to present? How do these financial statements compare to those typically prepared prior to SFAS 117?

> Which standards-setting bodies are assigned responsibility for establishing accounting and financial reporting standards for not-for-profit organizations? What issues remain unfinished on the FASB’s technical agenda for not-for-profit organizations (NPOs

> Explain how organizations in the not-for-profit sector differ from organizations in the public sector or for-profit business sector. Provide an example of an entity in each sector.

> How does a not-for-profit fund-raising foundation account for a gift intended for the benefit of a particular charity when the donor stipulates that the fundraising foundation may use its discretion to make the gift available to a different charity?

> What are special events? Give a few examples. Are special events conducted by the NPO reported differently on the statement of activities than special events conducted by an organization that is independent of the NPO?

> What criteria must be met before donated services can be recorded as contribution revenue and an expense? Give an example of a service that might qualify as a donated service for accounting purposes.

> Distinguish between program services expenses and supporting services expenses. Why is it important that NPOs report expenses for program services separately from those for supporting services?

> Discussion at a local meeting of government financial officers centered on using a balanced scorecard to present information to the public on the government’s Web site. Describe the components of a balanced scorecard and its advantages in communicating p

> What advantages does total quality management (TQM) offer a government? Is it fundamentally a budget approach?

> Identify some essential components of an annual budget process for a state or local government.

> As a certified public accountant, you have been asked by a group of local citizens to assist in establishing a not-for-profit organization for the purpose of raising funds to keep their neighborhood safe and clean. These people are concerned about the gr

> Describe the advantages of performance budgeting and program budgeting over incremental budgeting in a governmental entity.

> What is the difference between two types of line-item budgeting approaches—incremental budgeting and zero-based budgeting? Which of the two approaches is more widely used by governments?

> Explain how strategic planning, budgeting, and performance measurement can be integrated in a government and why this integration is desirable.

> “The sole objective of budgeting in a governmental entity is to demonstrate compliance with appropriation legislation.” Do you agree or disagree? Explain.

> The finance officer of a small city has heard that certain items of cost may be allowable under federal grants, even though they were not incurred specifically for the grant. To what source could the finance officer go to determine what costs are allowab

> Explain why conventional cost accounting systems have become less useful in both business and government settings. How does activity-based costing (ABC) reduce the problems created by conventional cost accounting systems?

> What are the three broad categories of service efforts and accomplishments (SEA) measures? Explain the GASB’s role in developing standards for SEA reporting.

> The City of Ankeny, Iowa, has produced a Service Efforts and Accomplishments report since 2003 in an attempt to answer the question, “Am I getting my money’s worth?” for its citizens. The city receive

> Eagleview City prepares a quarterly forecast of cash flows for its water service department. Data for the upcoming quarter (in alphabetical order) measured on the cash basis are presented below. The city maintains no more than the minimum cash balance

> The police chief of the Town of Meridian submitted the following budget request for the police department for the forthcoming budget year 2011–12. Upon questioning by the newly appointed town manager, a recent masters graduate with a

> The Little Feet Dance Association is a performing arts program in an urban area. It was established to increase appreciation for dance among youth and strengthen social bonds in the community. The association has been in existence for several years, and

> A portion of the General Fund operating budget for Southwest City’s Street Department follows here and on subsequent pages. Required After reading and evaluating the budget information for the Street Department of Southwest City, answe

> Choose the best answer. 1. An often used approach to budgeting that simply derives the New Year’s budget from the current year’s budget is called: a. Planning-programming-budgeting. b. Incremental budgeting. c. Zero-based budgeting. d. Performance budget

> On the basis of the following data, prepare a statement for the Town of Chippewa for the year ended June 30, 2011, showing the total cost of solid waste removal and the cost per ton of residential solid waste removed or cubic yard of commercial solid was

> The midsize City of Orangeville funds an animal control program intended to minimize the danger stray dogs pose to people and property. The program is under scrutiny because of current budgetary constraints and constituency pressure. An animal control wa

> The director of a not-for-profit organization was overheard saying that government auditing standards (GAGAS) were developed by the federal government to ensure that local governments were spending federal funds appropriately. Therefore, her organization

> What are the major types of auditor services described in the Government Accountability Office’s Government Auditing Standards (yellow book), and how do they differ?

> Define GAGAS, and describe how GAGAS differ from GAAS.

> A new board member for the Fire Protection District (a special purpose government) was reviewing the audit report for the district and noted that, although the district received an unqualified opinion, the audit report was longer than the one received by

> What is an opinion unit and of what significance is an opinion unit to the auditor?

> What are the three levels of audit to which a government or not-for-profit entity may be subject? Who is responsible for setting the standards or requirements for each of the three levels identified?

> The following is the pre-closing trial balance for Horton University as of June 30, 2011. Additional information related to net assets and the statement of cash flows is also provided. Additional information Net assets released from temporary restrict

> What are the benefits of having an audit committee?

> Explain how federal award programs are selected for audit under the risk based approach.

> How is an OMB Circular A-133 audit related to a GAGAS audit? How is an OMB Circular A-133 audit different from a GAGAS audit?

> What is a revocable split-interest agreement and how is it recorded by a private college?

> What is an annuity agreement and how does it differ from a life income fund?

> Explain the conditions that must exist for a public or private college or university to avoid accounting recognition of the value of its collections of art, historical treasures, and similar assets.

> A private college has received a multi-year unconditional pledge from a major supporter. How will the college report the pledge in its financial statements?

> Compare the reporting of contributed services by private and public colleges and universities.

> What are some of the accounting and reporting differences between endowments and split-interest agreements?

> Following are several unrelated transactions involving a university. 1. In fiscal year 2011, the university was notified by the federal government that in 2012 it would receive a $500,000 grant for wetlands research. 2. The university received $234,000 i

> Private colleges and universities report temporarily and permanently restricted net assets. What, if any, comparable reporting is provided by public universities?

> Explain how restricted gifts and grants are reported by a public college or university. How would such restricted gifts and grants be recorded and reported by a private college or university?

> What are restricted assets and how are they shown in the financial statements?

> Describe some measures of performance that can be used in assessing whether a university operates effectively.

> Breyer Memorial Hospital received a $100,000 gift that was restricted by the donor for heart research. At fiscal year-end Breyer had incurred $25,000 in expenses related to this project. Explain how these transactions would be reported in Breyer’s balanc

> What is the difference in accounting for investments among investor-owned, not-for-profit, and governmental health care organizations?

> Elizabeth College, a small private college, had the following transactions in fiscal year 2011. 1. Billings for tuition and fees totaled $5,600,000. Tuition waivers and scholarships of $61,500 were granted. Students received tuition refunds of $101,670.

> Choose the best answer. 1. Under GASB standards, public colleges and universities engaged only in business-type activities present all of the following statements in their stand-alone reports except a: a. Statement of net assets. b. Statement of revenues

> The following balances come from the trial balance of Sherlock State College as of the end of the 2011 fiscal year. Required a. Prepare a statement of revenues, expenses, and changes in net assets for the year ended June 30, 2011, in good form. See Ill

> As part of your audit firm’s quality control policies, it maintains a record of continuing profession education (CPE) taken by professional staff members. Following is information on some of the classes, sessions, workshops, and conferences that the audi

> Choose the best answer. 1. Which of the following activities would always indicate that an auditor’s independence has been impaired? a. Providing advice on establishing an internal control system. b. Posting adjusting journal entries into the client’s ac

> Following is the unqualified audit report for the City of Sand Key. The Honorable Mayor Members of the City Commission and City Manager City of Sand Key We have audited the accompanying financial statements of the City of Sand Key (the City) as of and fo

> Indicate which of the following activities performed by an auditor for a governmental client are (a) allowable, (b) permitted if safeguards are in place, or (c) prohibited. 1. Serving as an adviser on the building subcommittee for the county. 2. Preparin

> Quad-States Community Service Agency expended federal awards during the most recent fiscal year in the following amounts for the programs shown: Additional information indicates that Programs 4 and 10 were audited as major programs in each of the two p

> The City of Topeka, Kansas, has received a Distinguished Budget Presentation Award for at least 12 years. An excerpt from the 2008 Budget is presented on the next page: Financial Policies, Guidelines, and Practices Budgeting, Accounting, and Audit Practi

> You are a governmental accountant for a large municipality, and you have recently been assigned to the Budget office and charged with building a better budget document—one that will be of the highest quality so that citizens and others with an interest i

> What is an example of a performance indicator and to what would it compare in investor-owned financial reporting?

> As a cost reimbursement accountant in a large public research university, you are aware that federal agencies have increased auditing efforts in the area of federal research grants to higher education institutions. In particular, OMB Circular A–21 detail

> The federal government through the Medicare and Medicaid programs is one of the largest providers of patient service revenues to health care organizations. Information concerning these programs is available through the Department of Health and Human Serv

> Responding to a growing need for medical care as its population grew in the early 1900s, Suffolk County founded the Suffolk County Hospital in 1920, financing construction of the original hospital building and equipment with a $500,000 general obligation

> The local newspaper of a large urban area printed a story titled “Charity Care by Hospitals Stirs Debate.” The story quotes one legislator who wants “to ensure that the state’s nonpr

> The U.S. Department of Health and Human Services maintains the Web site www.hospitalcompare.hhs.gov, which provides an array of process of care and outcome of care measures that report on how well individual hospitals are caring for their patients, compa

> Choose the best answer. 1. The organization assigned primary responsibility for establishing accounting and financial reporting standards for health care organizations is the: a. American Institute of CPAs (AICPA). b. Financial Accounting Standards Board

> The Phelps Community Hospital balance sheet as of December 31, 2010, follows. Required a. Record in general journal form the effect of the following transactions during the fiscal year ended December 31, 2011, assuming that Phelps Community Hospital is

> Examine the financial statements for Oak Valley Hospital for the years ended December 31, 2010, and 2011. Required Prepare a short answer to address each of the following questions. a. Discuss the relative importance of different classifications of asse

> During 2011, the following selected events and transactions were recorded by Nichols County Hospital. 1. Gross charges for hospital services, all charged to accounts and notes receivable, were as follows: 2. After recording patient service revenues, it

> During its current fiscal year, Dearborn General Hospital, a not-for-profit health care organization, had the following revenue-related transactions (amounts summarized for the year). 1. Services provided to inpatients and outpatients amounted to $9,600,

> How do the accounting treatments for charity services, patient discounts, contractual adjustments, and provision for bad debts differ in terms of their effects on patient service revenues and related receivables? Explain any differences between not-for-p

> The following transactions occurred at Jackson Hospital: 1. Under the will of Samuel H. Samuels, a bequest of $100,000 was received for research on gerontology. The principal of the bequest, as well as any earnings on investments, is expendable for the s

> Renfrow Rehabilitation Center uses fund accounting for internal purposes. Presented is the December 31, 2011 balance sheet prepared from the funds the center uses. Required The controller asks that you prepare an aggregated balance sheet in accordance w

> Rosemont Hospital, a not-for-profit hospital, recorded the following transactions. For each transaction, indicate the appropriate revenue or gain classification by selecting the letter or letters of that (those) classification(s) from the list in the rig

> The Shelter Association of Jefferson County receives the majority of its funding from the local chapter of the United Way. That federated fund-raising organization has a policy that if a member agency reports unrestricted net assets in excess of one year

> For several years, Baytown Rehabilitative Camp for Disabled Children (hereafter referred to as the camp) has applied for an operating grant from the Baytown Area United Way. As the finance adviser for the local United Way allocation panel, it is your res

> Compass State University Foundation (CSUF) was incorporated as a not-for-profit organization to support a public university in its fund-raising efforts and the management of its endowment. The foundation has a self-perpetuating board, one-third of whose

> The financial manager of a not-for-profit child care center wants to improve the monthly report to the board and has decided to include performance measures. What issues should the manager consider in calculating and reporting measures of performance? Wh

> Why are the intermediate sanction regulations an important tool for the IRS to use in curbing abuses such as excessive management compensation?

> A new not-for-profit board member suggests that the NPO create a separate audit committee to work with the external auditors. The other board members feel that it is already difficult to find community people with financial expertise who have the time to

> How can a not-for-profit museum ensure that its gift shop activities will not result in an unrelated business income tax liability?

> What are the required financial statements for (a) a not-for-profit health care entity and (b) a governmental health care entity reporting only business-type activities?

> Describe the general ways that the revised Form 990, applicable for tax year 2008 and beyond, is different from previous versions.

> What are the distinguishing characteristics between a public charity and a private foundation? Why do these differences result in different federal reporting requirements?

> Using Illustration 15–3 as a guide, indicate under which Internal Revenue Code section each of the following public charities is most likely to be exempt from federal income tax. a. Ottowa County Credit Union. b. Midwest Rheumatoid Arth