Certified Government Auditing Professional (CGAP) Practice Exam

Which of the following is not an objective of compliance audits?

1. Evaluate federal agency actions related to the Privacy Act

2. Assess costs claimed by grantees against regulations

3. Review past achievements under federal grants

4. Check adherence to Federal Acquisition Regulation

The correct answer is: Review past achievements under federal grants

Compliance audits are primarily focused on determining whether an organization or entity is following applicable laws, regulations, and guidelines. The essence of compliance audits is to ensure that actions taken by an agency or organization align with the legal standards set forth by governing bodies. Evaluating federal agency actions related to the Privacy Act assesses compliance with a specific regulation concerning the treatment of personal information. Similarly, assessing costs claimed by grantees against regulations directly evaluates whether financial transactions align with the rules set for the disbursement and use of federal funds. Checking adherence to the Federal Acquisition Regulation directly addresses compliance with regulations governing procurement processes for federal agencies. However, reviewing past achievements under federal grants does not conform to the fundamental objectives of a compliance audit, which are more about current adherence to regulations rather than historical performance or accomplishments. This aspect focuses more on accountability and performance measurement rather than on compliance with regulations, which is why it is not considered a primary objective of compliance audits.