Get AGA CGFM Exam Practice Questions - Real and Updated

Answer : C

* What Is Pay.gov?

Pay.gov is an electronic lockbox system managed by the U.S. Department of the Treasury. It allows federal agencies to collect payments electronically, improving efficiency and reducing the time and cost associated with manual payment processing.

It supports online payments for taxes, fees, and other government-related obligations.

* Why Is It an Electronic Lockbox?

Pay.gov consolidates and processes payments on behalf of federal agencies, similar to how a lockbox service processes payments for private businesses.

* Why Other Options Are Incorrect:

A . Zero-balance account: This refers to a type of bank account that maintains a balance of zero by automatically transferring funds as needed, unrelated to Pay.gov's purpose.

B . Concentration system: Refers to pooling funds from multiple accounts into one central account, not payment processing.

D . Data warehouse system: A data warehouse stores and organizes large amounts of data for analysis, unrelated to payment collection.

* Reference and Documents:

Answer : A

* Why Hire Contractors for Management Control Evaluations?

Management may decide to bring in external contractors when there are gaps in the organization's capacity to perform evaluations internally. One key factor is the lack of management expertise---if management lacks the necessary knowledge or experience to evaluate controls effectively, it may outsource this task to qualified contractors.

* Why Other Options Are Incorrect:

B . Availability of Qualified Contractors: While availability is a factor, it's not a variable that influences the decision to outsource. Instead, it's a logistical consideration once the decision has been made.

C . Suspicion of Internal Fraud: Suspicion of fraud may lead to investigations, but hiring contractors to evaluate controls is driven by expertise gaps rather than fraud concerns.

D . Knowledge of Systemic Deficiencies: If management already has knowledge of systemic deficiencies, they may focus on remediation rather than outsourcing evaluations.

* Reference and Documents:

GAO Standards for Internal Control in the Federal Government (Green Book): Emphasizes the need for knowledgeable personnel to evaluate controls.

GAGAS (Yellow Book): Highlights the role of external expertise in cases where internal expertise is insufficient.

Answer : A

Regression Analysis:

Regression analysis is a statistical method used to examine relationships between variables and make predictions.

To estimate sales tax revenue, a CGFM can use regression to analyze how population growth, housing, and employment trends correlate with tax revenue over time.

Explanation of Answer Choices:

A . Regression analysis: Correct. This method uses historical and predictive data to model the relationship between variables (e.g., population growth and sales tax revenue).

B . Cash flow analysis: Focuses on analyzing cash inflows and outflows, not predicting revenue based on external factors.

C . Payback analysis: Used to calculate the time needed to recover an investment, unrelated to tax revenue estimation.

D . Flow charting: Used to visualize processes, not for predictive analytics.

Association of Government Accountants (AGA), Predictive Analytics in Public Sector Finance.

Answer : D

* What Is Vertical Analysis?

Vertical Analysis evaluates a single year's financial statements by expressing each line item as a percentage of a base amount. For example, in an income statement, each expense may be presented as a percentage of total revenue.

This approach helps users understand the relative size of each financial statement item within the context of the total.

* Why Is Vertical Analysis Used for a Single Year?

Vertical analysis focuses solely on relationships within a single set of financial statements, making it the appropriate choice for single-year evaluations.

* Why Other Options Are Incorrect:

A . Comparative: Involves comparing financial data across entities or periods, not within a single year.

B . Horizontal: Focuses on changes in financial data over time (year-to-year comparisons).

C . Trend: Examines patterns over multiple periods to identify long-term trends, not a single year.

* Reference and Documents:

GAO Financial Audit Manual: Recommends vertical analysis for single-year financial statement evaluations.

AICPA Financial Statement Analysis Guide: Provides detailed examples of vertical analysis techniques.

Answer : B

* What Is Earned Value Management (EVM)?

EVM is a project management methodology that integrates scope, cost, and schedule to measure project performance. It provides a comprehensive view of progress by combining information about deliverables (work completed), funds (budget spent), and time (schedule adherence).

* Why Is EVM Preferred Over Traditional Project Management?

EVM offers a holistic view of project performance by quantifying progress and comparing it to planned performance, allowing for proactive decision-making.

Traditional project management often focuses on individual aspects (e.g., timelines or budgets) without integrating them as effectively as EVM.

* Why Other Options Are Incorrect:

A . EVM monitors smaller projects: EVM is not restricted to small projects; it is widely used for complex, large-scale projects.

C . Traditional project management is used for larger projects: This is incorrect---both methodologies can be used for projects of any size.

D . Traditional project management provides status on deliverables, funds, and time: This is inaccurate; traditional methods often lack the integrated performance tracking provided by EVM.

* Reference and Documents:

GAO Guide to Project Management: Recommends EVM for comprehensive performance tracking.

PMBOK (Project Management Body of Knowledge): Details the advantages of EVM over traditional project management.