GASB And FASAB Standards Practice Test

The introductory section is meant to orient readers and set the tone for the CAFR. The item you’re most likely to find there is the Letter of Transmittal. This formal communication explains the government’s mission, highlights major programs and initiatives, and provides an overview of significant financial activities and responsibilities. It helps readers understand the context for the rest of the report and what to look for in the financial statements. While organization charts and a directory of principal officials are also commonly included in the introductory portion to show governance structure, the Letter of Transmittal is the primary element readers expect to see up front. The summary of the government’s current financial position and results of financial activities belongs in the financial section as part of the analysis and the basic financial statements, not in the introductory portion.