CGFM Exam 2 - Section II Accounting and Reporting for State and Local Governments || with 100% Verified Solutions.

The reporting model for state and local governments focuses only on fiscal accountability. True or false? correct answers False. The reporting model focuses on both fiscal accountability, through fund-level reporting, and operational accountability, through government-wide reporting. Describe how financial reporting can assist in fulfilling government's duty to be publicly accountable. correct answers Financial reporting by governments assists users in assessing accountability and assists in making economic, social, and political decisions. Which of the following is not a primary user of external financial reports according to the GASB? a. the media b. investors c. department managers d. city council correct answers C. Department mangers are internal users of reports. GASB only considers external users of reports in the standard-setting process. If a preparer or auditor wants to find out how a transaction should be reported, the authoritative place to look would be the standards and interpretations issued by the GASB. True or false? correct answers True. According to GASB 76, the first level in the hierarchy of governmental account principles is GASB standards and interpretations. Describe the financial reporting entity for state and local governments. correct answers The financial reporting entity consists of: 1. the primary government 2. organizations to which the primary government is financially accountable 3. other organizations for which the nature and significance are such that their exclusion would cause the reporting entity's financial statements to be misleading or incomplete. Which of the following is the most important factor in determining if a government is part of a primary government? a. misleading to exclude b. services provided c. financial accountability d. affiliation to primary government correct answers C. Financial accountability is the most important factor.