AGA GFMC Exam With Confidence Using Practice Dumps

Governmental Attestation Engagements:

These engagements involve providing assurance on specific elements of financial or non-financial information, such as compliance with laws, contracts, or bond covenants.

Reviewing revenue coverage requirements for outstanding bonds fits the scope of attestation engagements, which focus on confirming adherence to specific requirements.

Explanation of Answer Choices:

A. Monitor a subgrantee for compliance to the grant restrictions: Monitoring is a management responsibility, not typically part of an attestation engagement.

B. Establish a policy concerning fraud prevention: Establishing policies is a management duty, not a task for auditors.

C. Monitor purchasing card charges for compliance with travel policies: Monitoring is operational, not attestation-related.

D. Review the revenue coverage requirements on outstanding bonds: Correct. This falls within the scope of attestation engagements.

 What Is Efficient Inventory Management?

Efficient inventory management ensures that an organization has the right amount of inventory at the right time to meet operational needs without overstocking or understocking.

Proper inventory management minimizes disruptions to operations, including work stoppages due to lack of necessary materials or supplies.

 Why Is Fewer Instances of Work Stoppage the Correct Answer?

Efficient inventory management ensures that required inventory is available when needed, reducing the risk of work delays or stoppages caused by inventory shortages.

 Why Other Options Are Incorrect:

A. A low inventory turnover ratio:A low turnover ratio often indicates overstocking or slow-moving inventory, which is not a sign of efficiency.

B. High write-offs of obsolete inventory:Efficient management reduces obsolete inventory, leading to fewer write-offs, not more.

D. High total asset turnover:While efficient inventory management may contribute to overall asset efficiency, it does not directly result in a high total asset turnover ratio.

 References and Documents:

GAO Guide on Inventory Management:Emphasizes the role of inventory management in avoiding operational disruptions.

Best Practices for Inventory Management (AGA):Highlights reduced work stoppages as a key benefit of effective inventory control.

 What Is Forensic Accounting?

Forensic accountinginvolves investigating financial records to detect fraud, gather evidence, and support legal proceedings. It focuses on identifying and responding to fraud rather than proactively preventing it.

 Tasks Performed in Forensic Accounting:

Auditing accounting records (Option A):Forensic accountants review records to uncover irregularities or fraud.

Interviewing related parties (Option C):They conduct interviews to gather information and evidence.

Serving as an expert witness (Option D):Forensic accountants often testify in court to explain their findings.

 Why Prevention Is Not Part of Forensic Accounting:

Preventing fraud is typically the responsibility ofinternal controls, management, and auditors, not forensic accountants. Forensic accounting is reactive, addressing fraud that has already occurred.

 References and Documents:

GAO Forensic Auditing Standards:Highlights the role of forensic accounting in investigating, not preventing, fraud.

AICPA Forensic and Valuation Services Practice Aid:Focuses on investigative and litigation support tasks performed by forensic accountants.