Which legislation is discussed in the internal controls lesson, and what did it require?

Which legislation is discussed in the internal controls lesson, and what did it require?

• A. Federal Managers' Financial Integrity Act (FMFIA) of 1982. Requires federal entities to establish internal controls, perform ongoing evaluations of the adequacy of those controls, and prepare related reports.
• B. Sarbanes-Oxley Act; requires private companies to establish internal controls over financial reporting.
• C. Federal Acquisition Regulation; governs procurement
• D. Government Performance and Results Act; sets performance measures

Answer: (A)

The main idea being tested is which federal law established the requirements for internal controls in government and what those requirements are. The Federal Managers' Financial Integrity Act of 1982 sets the framework: federal entities must establish internal controls, perform ongoing evaluations of their adequacy, and prepare reports related to internal control and financial management. In practice, this means agencies document how their controls are designed, regularly assess whether they are operating effectively (often annually), and report findings, including any material weaknesses and corrective actions, to the President and Congress. This focus on creating, testing, and reporting on internal controls is what ties the lesson to this statute. The other options don’t fit because they address different contexts or purposes. The Sarbanes-Oxley Act targets private-sector companies and their internal controls over financial reporting, not federal agencies. The Federal Acquisition Regulation governs procurement processes. The Government Performance and Results Act concentrates on setting performance goals and measuring outcomes, not on internal control reporting.

The main idea being tested is which federal law established the requirements for internal controls in government and what those requirements are. The Federal Managers' Financial Integrity Act of 1982 sets the framework: federal entities must establish internal controls, perform ongoing evaluations of their adequacy, and prepare reports related to internal control and financial management. In practice, this means agencies document how their controls are designed, regularly assess whether they are operating effectively (often annually), and report findings, including any material weaknesses and corrective actions, to the President and Congress. This focus on creating, testing, and reporting on internal controls is what ties the lesson to this statute.

The other options don’t fit because they address different contexts or purposes. The Sarbanes-Oxley Act targets private-sector companies and their internal controls over financial reporting, not federal agencies. The Federal Acquisition Regulation governs procurement processes. The Government Performance and Results Act concentrates on setting performance goals and measuring outcomes, not on internal control reporting.