Certified Government Auditing Professional (CGAP) Practice Exam

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Prepare for the Certified Government Auditing Professional (CGAP) Exam with interactive quizzes! Enhance your understanding with flashcards and detailed explanations. Aim for success and feel confident on exam day.

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Which of the following statements about integrity services provided by auditors is not true?

  1. It should not be necessary for the auditor to seek guidance from legal counsel.

  2. If dealing with alleged "abuse," the auditor may not need to identify a law as criteria.

  3. "Fraud" is defined as an illegal act involving willful misrepresentation.

  4. Under GAGAS, the auditor should ask management about the risk of fraud.

The correct answer is: It should not be necessary for the auditor to seek guidance from legal counsel.

The statement indicating that it should not be necessary for the auditor to seek guidance from legal counsel is not true because auditors often encounter complex legal issues during an audit. Integrity services involve assessing ethical conduct and compliance with laws and regulations, which can necessitate legal interpretations that fall outside the auditor's expertise. Seeking legal counsel ensures that auditors fully understand their obligations and the implications of their findings. This is particularly important in cases of suspected fraud or misconduct, where the legal ramifications can be significant. In contrast, the other statements reflect accurate understandings of auditors' responsibilities regarding integrity services. Knowledge regarding dealing with alleged abuse can vary based on the context and doesn't necessarily require a specific legal criterion, since the auditor's role may involve more subjective assessments of behavior and organizational culture. The definition of fraud as an illegal act involving willful misrepresentation captures the essence of fraudulent activities, which are crucial for auditors to identify and address. Furthermore, under the Generally Accepted Government Auditing Standards (GAGAS), inquiring about the risk of fraud is a fundamental part of the auditor's responsibilities, as it helps to identify potential issues that must be considered during the audit process.