Which statement about the Green Book is true?

Which statement about the Green Book is true?

• A. It sets standards for internal control in the federal government
• B. It governs private sector accounting
• C. It prescribes penalties for internal control failures
• D. It is a budgeting guide

Answer: (A)

The Green Book establishes standards for internal control in the federal government. Published by the Government Accountability Office, it provides a framework with components and principles that federal agencies use to design, implement, and monitor controls so assets are safeguarded, financial reporting is reliable, operations are efficient, and laws are followed. It applies to the federal government, not private-sector accounting (which follows private-sector standards like GAAP/IFRS). It doesn’t prescribe penalties or serve as a budgeting guide. So the statement that it sets standards for internal control in the federal government is true.

The Green Book establishes standards for internal control in the federal government. Published by the Government Accountability Office, it provides a framework with components and principles that federal agencies use to design, implement, and monitor controls so assets are safeguarded, financial reporting is reliable, operations are efficient, and laws are followed. It applies to the federal government, not private-sector accounting (which follows private-sector standards like GAAP/IFRS). It doesn’t prescribe penalties or serve as a budgeting guide. So the statement that it sets standards for internal control in the federal government is true.