The Chief Financial Officers (CFO) Act of 1990 first mandated the preparation and audit of financial statements for the 24 largest federal agencies. While subsequent acts like the Government Management Reform Act of 1994 (GMRA) built upon this by requiring a consolidated government-wide financial statement, a significant number of smaller agencies remained exempt. The Accountability for Tax Dollars Act of 2002 (ATDA) specifically addressed this gap by amending the CFO Act to extend the requirement for preparing and submitting annual audited financial statements to most executive branch agencies that were not originally covered, thereby expanding the mandate to "virtually all" federal agencies.

A. The CFO Act of 1990 initiated the audit requirement but limited its scope to only the 24 largest federal agencies.

C. The Federal Financial Management Improvement Act of 1996 focused on requiring agencies to maintain compliant financial management systems, not on expanding the number of agencies subject to audit.

D. The Government Management Reform Act of 1994 required a consolidated financial statement for the government but did not expand the audit requirement beyond the original CFO Act agencies.

1. U.S. Government Accountability Office (GAO). (2004, March). Financial Management: The Challenge of Federal Financial Accountability (GAO-04-475T). p. 3. "The Accountability of Tax Dollars Act of 2002 (ATDA) extended the requirement to prepare audited financial statements to most executive branch agencies not covered by the CFO Act."

2. Office of Management and Budget (OMB). (2023, June). Circular No. A-136, Financial Reporting Requirements. Section I.1, p. 1. "The Accountability of Tax Dollars Act of 2002 (ATDA) (P.L. 107-289) extended the requirement to prepare audited financial statements to most executive branch agencies not covered by the CFO Act."

3. Association of Government Accountants (AGA). (2020). CGFM Examination 1 Study Guide: Governmental Environment. Chapter 2: Federal Financial Management, Section: Key Federal Financial Management Legislation. This section details the progression of legislation, noting the CFO Act established the initial requirement and the ATDA expanded it to smaller agencies.

4. Granof, M. H., Khumawala, S. B., & Smith, P. A. (2016). Government and Not-for-Profit Accounting: Concepts and Practices (7th ed.). Wiley. Chapter 16, "Federal Government Accounting," discusses the legislative history, stating that the ATDA of 2002 "extended the requirement for audited financial reports to most federal entities not covered by the CFO Act."