Certified Government Financial Manager (CGFM) 2025 – 400 Free Practice Questions to Pass the Exam

Separate audit opinions are necessary for each Major Enterprise Fund in governmental audits because these funds are generally significant to the overall financial statements of the government entity. Major Enterprise Funds often operate in a manner similar to private businesses and are expected to adhere to full accrual accounting principles, making their financial performance more relevant to stakeholders. The separate opinion provides transparency regarding the financial health and compliance of these funds, which is imperative for users of financial statements, including taxpayers, bondholders, and government officials.

In contrast, while Government Activities, Combined Non-Major Funds, and Combined Other Enterprise Funds may require some level of evaluation, they typically do not necessitate separate opinions unless they meet the criteria for major funds set by the Governmental Accounting Standards Board (GASB). This stipulation underscores the importance of accountability and financial reporting, as major funds directly impact the financial positions of the state or local government. Thus, each Major Enterprise Fund must be assessed individually to ensure that stakeholders receive a clear and comprehensive understanding of each fund's performance.