Certified Government Auditing Professional (CGAP) Practice Exam

What element is missing to develop a traditional finding in the case of a recreation center audit?

1. None

2. Cause

3. Effect

4. Criteria

The correct answer is: Criteria

To develop a traditional finding in an audit, particularly in the context of a recreation center audit, it's essential to establish clear criteria for evaluating the subject matter. Criteria serve as the benchmarks or standards against which the operations or financial practices of the recreation center can be assessed. They outline the expected standards or policies that must be adhered to. In the context of an audit finding, the criteria allow auditors to determine whether the practices observed align with expected norms or regulations. Without criteria, auditors cannot effectively evaluate the performance or compliance of the recreation center with relevant laws, guidelines, or operational standards, making it challenging to justify any findings related to cause, effect, or other elements of the audit. This is why the absence of criteria would fundamentally hinder the development of a traditional finding in this scenario. The other elements—cause and effect—relate to what has led to any issues identified and the impact of those issues, respectively. However, even if these elements are identified, without established criteria, it would be difficult to substantiate any findings or recommendations. Thus, criteria are essential to give context and authority to the findings in an audit.