Certified Government Auditing Professional (CGAP) Practice Exam

Under GAGAS, which type of engagement has three levels of performance?

1. Consulting

2. Performance Audit

3. Attestation

4. Financial Audit

The correct answer is: Attestation

The correct answer refers to attestation engagements, which are characterized by three levels of performance under Government Auditing Standards, commonly known as GAGAS. These three levels involve varying degrees of assurance that an auditor provides concerning the subject matter. Attestation engagements can be classified into three categories based on the level of assurance offered: examination (high level of assurance), review (moderate level of assurance), and agreed-upon procedures (no assurance). Each level reflects the extent of detail and the types of procedures performed by auditors. Understanding the distinctions in these performance levels is critical for government auditors as it guides the engagement process and influences the reporting requirements. This layered approach allows auditors to tailor their engagements to the specific needs of the client and the level of confidence required regarding the findings. In contrast, while performance audits and financial audits are important types of engagements under GAGAS, they do not follow the same structure of three distinct levels of performance as attestation engagements do. Performance audits focus on efficiency and effectiveness, while financial audits emphasize compliance and accuracy of financial statements, which are different from the attestation framework.