Certified Government Auditing Professional (CGAP) Practice Exam

Which statement regarding GAGAS is inaccurate?

1. General Standards cover both performance and financial audits

2. Fieldwork standards address planning, supervision, and evidence

3. Reporting standards include contents and report quality elements

4. GAGAS adds reporting requirements to AICPA's GAAS only

The correct answer is: GAGAS adds reporting requirements to AICPA's GAAS only

The accurate characterization of GAGAS, or Generally Accepted Government Auditing Standards, is that it extends and modifies the standards set out by AICPA's GAAS, rather than simply adding to them. While GAAS provides a solid foundation for auditing practices, GAGAS encompasses broader standards for government auditing, including ethical principles, the need for additional reporting, and specific accountability measures unique to government entities. The reporting requirements intrinsic to GAGAS provide a framework that ensures transparency and accountability in government operations, which are not necessarily present in GAAS. This makes GAGAS stand apart by requiring auditors to consider the specific context of public service, which is integral to government audits. The other statements correctly reflect aspects of GAGAS: the general standards do indeed cover both performance and financial audits, fieldwork standards specifically relate to planning, supervision, and evidence gathering, and reporting standards are highlighted for their focus on content and quality, all of which support the integrity and thoroughness expected in government auditing.