Question: You are considering making a contribution to

> Gail McCook, the administrative assistant of a local CPA firm, merged the files listing GAAS standards and GAGAS standards. Because the firm performs both GAAS and GAGAS audits, it is important to identify which standards are applicable to which audits.

> Following is a list of a number of accounts used by federal agencies. Required: For each of the accounts listed indicate in Column A whether the account is a proprietary account (P) or a budgetary account (B). In Column B indicate whether the account

> Access the most recent Financial Report of the U.S. Government at the U.S. Treasury Department Web site, www.fms.treas.gov/fr, and answer the following questions. Required: a. What are amounts of the total budget deficit and net operating cost for eac

> The source of authoritative guidance for federal financial accounting and reporting is the Federal Accounting Standards Advisory Board. To better understand the FASAB, access its Web site at www. fasab.gov to answer the following. Required: a. What is t

> In 2013, 22 of 24 CFO Act agencies received unqualified (unmodified) audit opinions. The Comptroller General disclaimed an opinion on one agency, and one agency received a qualified opinion. The one agency receiving a qualified opinion was HUD (Housing a

> The U.S. Department of Health and Human Services maintains the Web site www.hospitalcompare. hhs.gov, which provides an array of measures that report on individual hospitals and other types of health care providers. Access the Web site for help in co

> In 2010, Congress passed and the President signed into law the Patient Protection and Affordability Act. The act provides for sweeping changes to health care and has been extremely controversial. To learn more about this act, go to www.healthcare.gov

> Custer County receives pass-through funds from the state’s Department of Justice to assist in administering the federally funded Public Safety Partnership and Community Policing Grants program (also referred to as Community Oriented Policing Services [CO

> The Internal Revenue Service (IRS) initiated a study of not-for-profit hospitals in 2006. One purpose of the study was to help the IRS better understand the community benefit provided by not-for-profit hospitals. Community benefit is a critical factor in

> Carol Hernandez has recently been appointed director of the foundation for a private university located in the state of Minnesota. She is intent on learning as much as she can about the foundation’s responsibilities concerning the management and investme

> The chief administrator for a group of not-for profit early education centers and outreach facilities has hired you to conduct an audit. A mission of the organization is to provide child care and early education to children in economically distressed are

> Following is the governmental activities pre-closing trial balance for the Town of Freaz. Freaz is a relatively small town and, as a result, it has only governmental funds (i.e., it uses no proprietary funds). There are no component units. To complete th

> A city has approached you concerning the audit of its 2017 financial statements. State law requires the city to have an audit and submit the audited financial report to the state. New elections at the beginning of the fiscal year resulted in a change in

> Illustration 10–4, adapted from Crawford and Associates, lists several ratios under the heading Financial Position. Which of the ratios listed most closely aligns with the GASB research study definition of financial position provided on page 409? Explain

> Lake View Mental Health Affiliates, a nongovernmental not-for-profit organization, has contacted William Wise, CPA, about conducting an annual audit for its first year of operations. The governing board wishes to obtain an audit of the financial statemen

> The city council members of Laurel City are considering establishing an audit committee as a subset of the council. Several members work for commercial businesses that have such committees. They have asked your advice as a partner in the public accountin

> A federal government initiative to rate public colleges and universities has been undertaken by the U.S. Department of Education. Performance measures for K–12 education have been part of the federal funding initiative for many years with such programs a

> One of the responsibilities of an auditor is to determine the appropriate GAAP for the entity being audited. In December, 2013, GASB issued an exposure draft titled “ The Hierarchy of Generally Accepted Accounting Principles for State and Local Governmen

> The City of St. Cloud, Minnesota, annually prepares a trend report using the ICMA’s Financial Trend Monitoring System. The table presented here captures trend information provided by St. Cloud in its 2013 Annual Financial Trend Report.

> In 2010 the city had failed to honor its guarantees on The Harrisburg Authority (THA) debt. (THA is a component unit of the city.) In 2011 Harrisburg filed for bankruptcy; however, the bankruptcy petition was denied by the court. The State of Pennsylvani

> You are a new city council person for the City of Columbia, Missouri. You are aware that several cities have been in the news recently because of the financial crises they have faced. The governing bodies have been criticized for not being aware of the n

> Identify some of the characteristics of a government’s citizens that can affect the government’s financial condition. Explain how the characteristics affect financial condition.

> Examine the following tables from the Financial Trend Monitoring Report for the Town of Oakdale that reports on fiscal year 2017. The performance indicators selected are total revenue and revenue per capita. The town provides three reference groups wi

> Throughout Chapters 2-9 reference has been made to the City and County of Denver’s Comprehensive Annual Financial Report (CAFR). In addition to issuing the CAFR the City and County of Denver issues a Popular Annual Financial Report (PAFR). To complete th

> Write the letters a through o on a sheet of paper. Beside each letter, put a plus ( 1 ) if a high or increasing value of the item is generally associated with stronger financial condition, a minus ( 2) if a high or increasing value of the item is ge

> In its notes to the financial statements t he City of St. Petersburg, Florida provided the following information about the amounts and classifications for the St. Petersburg fund balances. Use the information provided by St. Petersburg to complete thi

> The MD&A for the 2013 City and County of Denver CAFR is included as Appendix B in this chapter. Following are two tables that have been adapted from the statistical section of the CAFR. Use the MD&A and the provided statistical tables to complete

> Following are the operating statements for a public and private college. The operating statements have been adapted from the annual reports of a public and a private university. As would be expected, the reports are somewhat different. Catherine College

> Following are descriptions of several relationships between primary governments and other organizations.* * Information used in this case is adapted from information provided in the GASB Comprehensive Implementation Guide (Norwalk, CT, 2010). Required:

> *In the 2010 CAFR, Detroit indicated that its general obligation debt rating had been downgraded by Moody’s Investors Services from a Ba2 to a Ba3. Based on its fourth quarter Performance Dashboard 1 Detroit was subsequently downgraded

> Electronic Municipal Market Access (EMMA) provides investors and others interested in state and local government debt and financial information an excellent resource. By accessing EMMA an individual is able to learn about what type of debt is outstanding

> What is an IRC Sec. 527 organization? Are these organizations tax-exempt? What filing requirements have been imposed on 527 organizations by campaign finance laws?

> Discuss what, if any, political activity can be undertaken by a charitable NFP organization.

> What are the distinguishing characteristics between a public charity and a private foundation? What is a public support test and how does it relate to public charities and private foundations?

> What is the purpose of the Form 990? Because there are different types of Form 990, explain how an NFP would know which type it must file.

> Explain a major difference between a 501(c)(3) tax-exempt organization and a 501(c)(7) tax-exempt organization.

> Identify which level(s) of government regulate(s) NFP organizations and identify the source of authority.

> What are articles of incorporation and how do they differ from by-laws of a NFP organization?

> Obtain the most recent copy of the annual report for your college or university (school). Using the annual report, answer the following. Required: a. Does your school follow GASB or FASB standards? Use the financial statements to explain how you can tel

> 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 are the benefits of providing performance measures? How will board members be able to determ

> What are excessive benefits and what are the consequences of paying/receiving excessive benefits?

> What is a split interest agreement, and why do you believe a donor or a university would enter into such an agreement?

> The NACUBO expense accounts typically used by colleges and universities do not identify the program and support functions. Discuss whether colleges and universities are required to identify program and support expenses and how this is accomplished if the

> A private college has received pledges that are due within one year and pledges that are long-term (that is, due in more than one year). How will the college report the pledges in its financial statements?

> When would receipt of a grant be recorded as revenue rather than a contribution? Give an example of a transaction in which a grant would be recorded as revenue.

> How do private colleges and universities account for bad debts related to tuition and fees? Compare the accounting to that of public and for-profit (corporate) colleges and universities.

> For each of the following situations explain how a private and a public university would record the transaction (assume the grants are non exchange): notification of a grant to be received in the next fiscal year; receipt of a grant with a purpose restri

> Discuss whether colleges and universities are subject to audits under Government Auditing Standards (GAS).

> Identify the financial statements that must be prepared by a private college or university and those that must be prepared by a public college or university.

> What are some ways an audit report for a government differs from an audit report for a for-profit organization?

> As a newly hired staff auditor, you have been assigned to a governmental engagement that includes a single audit. Your supervisor asks you to familiarize yourself with OMB’s Uniform Administrative Requirements, Cost Principles, and Audit Requirements for

> In the context of a government audit, what is an opinion unit, and of what significance is an opinion unit to the auditor?

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

> What is the purpose of a financial audit? Who is responsible for setting standards for financial audits of government and not-for-profit organizations?

> What is EMMA and when would someone want to use EMMA?

> Identify factors that the rating agencies use in determining bond ratings. Which of the factors identified is beyond management control and how could this factor affect the government’s finances?

> Government Auditing Standards specifically outline an auditor’s responsibilities with respect to ethics and independence. What are the ethical principles and primary considerations with regard to independence, as identified in GAGAS? How do ethical princ

> In 2013, the Tampa Bay Times published a series of four articles uncovering some of the worst charities in America. Read the articles ( www.tampabay.com/topics/specials/ worst-charities. page ) and answer the following questions. Required: a. What

> Should citizens be concerned if the funded ratio for pension plans decreases over time? Why?

> When conducting a financial analysis, ratios based solely on governmental fund financial statements would not be considered sufficient for assessing economic condition. Explain why this statement would be true.

> Explain the difference between a blended and discretely presented component unit, and explain how each is reported.

> Under the hierarchy of GAAP, what sources of accounting principles have the most authority for state and local governments, federal government entities, and nongovernmental entities? Where do accountants and auditors look when a particular item is not co

> The GASB indicates that economic condition is composed of three components. Identify and define the three components of economic condition.

> State and general purpose local governments are considered primary governments. Under what circumstances a special purpose government would be considered a primary government?  

> Under GASB guidance when should an item be recognized on the face of the financial statements? Under what conditions, would the GASB indicate that a note disclosure should accompany an item that has been recognized on the financial statements?

> W hat are the two tracks in the dual-track accounting system? Explain the purpose of each track. Relate each track to state and local governmental “dual track” accounting.

> What are stewardship assets? How does the accounting for a stewardship asset differ from that for general property, plant, and equipment?

> The federal government uses two groups of funds. Identify the two fund groups, and the funds associated with each group. Compare the funds to those used by state and local governments.

> Go to the Internet Web sites of any five of the charitable organizations listed in Illustration 14–7 and search for financial information and performance measures they may disclose on their Web sites. Required: a. For the most recent year provided on t

> Defining the reporting entity at the federal level is complicated by different perspectives from which the federal government can be viewed. What are the three perspectives? How are they defined? How do they interrelate?

> Explain the differences among these accounts: (1) Estimated Revenues used by state and local governments, (2) Other Appropriations Realized used by federal agencies in their budgetary track, and (3) Fund Balance with Treasury used by federal agenci

> According to the FASAB conceptual framework, there are four objectives for federal financial reporting. Discuss the four objectives and explain why the focus of the FASAB objectives differs from that of the FASB or the GASB.

> Compare the GAAP hierarchy for the federal government to that for state and local governments (see Chapter 11).

> What are the components of the PAR and where would a federal agency go to find out the requirements for preparing a PAR?

> Explain the role of the Government Accountability Office (GAO), the Department of the Treasury, and the Office of Management and Budget (OMB) in the financial accounting and reporting of the federal government.

> What is the Patient Protection Affordability Act, and what impact has it had on NFP hospitals’ financial reporting and tax filing?

> What is premium revenue, and when is it recognized? Discuss the recognition of revenue relative to the revenue recognition and matching concepts in accounting.

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

> Tupper Memorial Hospital received from a donor a $50,000 contribution and a $50,000 pledge payable in one year. The donor required that the funds be used for heart research. Explain differences in accounting for the donor’s contribution and pledge if Tup

> Phyllis Gene is a certified human resource manager who serves on the board of a local professional association of human resource managers. The association puts on an annual conference for its members at which there are educational workshops and keynote s

> Discuss some of the presentation differences between the operating statements of not-for-profit and business-type governmental health care entities.

> 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? What, if any, differences exist in the ac

> 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?

> A board member of an NFP hospital has asked you what resources are available to help him in assessing the financial and operational performance of the hospital. Where would you?

> Since the FASB sets the standards for both not-for-profit health care entities and investor-owned entities, the financial reporting requirements are the same for these two entities. Do you agree with this statement? Why or why not?

> What is UPMIFA, and why is it important to colleges and universities? Does UPMIFA apply only to colleges and universities?

> 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 provide an example of how each co

> Identify some essential components of the annual budget process for a state or local government. How long might the process take?

> Robert Bland suggested that tensions may exist between stakeholders in a government’s budget process. Identify the six sets of stakeholders or topics with potential conflict in Bland’s model.

> Discuss some of the differences in the preparation and presentation of the operating statements of nongovernmental not-for-profit entities and governmental not-for-profit entities reporting as business-type entities.

> Go to the Web site for the American Institute of Certified Public Accountants (AICPA) ( www.aicpa.org) . Information relevant to the following questions can be located under the tab that provides information about the organization. Required: a. Under

> Explain the steps of a criminal prosecution.

> Janelle Rederford suffered from systemic lupus erythematosus when she was terminated from US Airways. Rederford brought suit against US Airways under the Americans with Disabilities Act (ADA), alleging that she had been wrongfully terminated because of h

> Explain the relationship between commercial impracticability and frustration of purpose.

> Spouses Kenneth and Betty Herman hired an attorney, Byrd, to create an amendable trust on their behalf. The Hermans intended the trust to include that after the death of one spouse, the surviving spouse would have control of the assets, including the pow

> Potential expert witnesses made an oral agreement with a plaintiff’s attorney to testify on behalf of the plaintiff for $60,000. However, after receiving the money, the witnesses backed out of the agreement and said they would not testify in court or pay

> The farmers are former customers of Ron Kaufman, the owner and operator of Southeast Implements, Inc., a Case International Harvester equipment dealership. Between 1996 and 1998, they agreed to purchase or lease various items of farm equipment from South

> Prime Finish paints and finishes plastic parts. In 2004, Herbert–Jones became an independent sales representative responsible for developing sales for Prime Finish and formed Cameo to serve this purpose. ITW supplies automotive parts to automakers. After

> The Laths were the owners of a farm that they wanted to sell. Mrs. Mitchell considered purchasing the land but found that an ice house located across the road was objectionable. Mitchell argued that the Laths orally agreed to remove the ice house in cons

> Identify the exceptions to the parol evidence rule and explain why some people might argue that the parol rule is not very effective.