Question 1

Internal Auditors are expected to add value to the organization through improved operational effectiveness.In addition, their responsibilities include all the following except:

Accepted Answer

A)  reviewing the reliability and integrity of information.
B)  ensuring compliance with the company's accounting policies.
C)  verifying accounting information for external users.
D)  ensuring compliance with applicable governmental regulations.E) A) and C)
F) C) and D) C

Question 2

Operational auditors must accumulate sufficient appropriate evidence to provide a basis for a conclusion about the objectives being tested.

Accepted Answer

A) True 
 B)False

Question 3

An operational auditor may use "engineered standards" as an evaluation criteria.

Accepted Answer

A) True 
 B)False

Question 4

When a state or local government agency receives federal funds, it is subject to the audit requirements of:

Accepted Answer

A)   
B)   
C)   
D)   E) All of the above
F) B) and D)

Question 5

How do the risk and materiality thresholds change in a government audit compared to a financial statement audit of a public company?

Accepted Answer

The Yellow Book recognizes that in gover...

Question 6

The professional organization which is responsible for providing guidance for internal auditors is the:

Accepted Answer

A)  APA.
B)  IIA.
C)  ABA.
D)  AIA.E) B) and D)
F) B) and C)

Question 7

Independence is a fundamental ethical principle for internal auditors.

Accepted Answer

A) True 
 B)False  False

Question 8

Effectiveness is concerned with whether defined goals are achieved, whereas efficiency is concerned with whether the goals are achieved with a minimum use of resources.

Accepted Answer

A) True 
 B)False

Question 9

Statements on Internal Auditing Standards are issued by the:

Accepted Answer

A)  AICPA.
B)  SEC.
C)  Internal Auditing Standards Boards.
D)  Auditing Standards Boards.E) C) and D)
F) A) and B) C

Question 10

Effectiveness refers to the degree to which costs are reduced without reducing efficiency.

Accepted Answer

A) True 
 B)False

Question 11

Benchmarking is one source of evaluation criteria for completing an operational audit.

Accepted Answer

A) True 
 B)False

Question 12

As compared to a financial audit, an operational audit:

Accepted Answer

A)   
B)   
C)   
D)   E) C) and D)
F) B) and D)

Question 13

Discuss each of the three broad categories (types)of operational audits.

Accepted Answer

•Functional.A functional audit deals wit...

Question 14

Which of the following is not a similarity between external and internal auditors?

Accepted Answer

A)  Both must be independent of the company.
B)  Both must be competent.
C)  Both follow a similar methodology in performing their audits.
D)  Both consider risk and materiality deciding the extent of their tests and evaluating results.E) C) and D)
F) All of the above

Question 15

Which of the following is not one of the major differences between financial and operational auditing?

Accepted Answer

A)  The financial audit is oriented to the past, but an operational audit concerns performance for the future.
B)  The financial audit report has widespread distribution, but the operational audit report has limited distribution.
C)  Financial audits deal with the information on the financial statements, but operational audits are concerned with the information in the ledgers.
D)  Financial audits are limited to matters that directly affect the fairness of the financial statement presentation, but operational audits cover any aspect of efficiency and effectiveness.E) B) and D)
F) B) and C)

Question 16

Which of the following statements regarding types of operational audits is likely incorrect?

Accepted Answer

A)  A functional audit has the advantage of permitting specialization by auditors.
B)  An advantage of functional auditing is its ability to evaluate interrelated functions.
C)  The emphasis in an organizational audit is on how efficiently and effectively functions interact.
D)  Special operational auditing assignments arise at the request of management.E) None of the above
F) A) and B)

Question 17

Government auditing standards are included in the Yellow Book.

Accepted Answer

A) True 
 B)False

Question 18

Auditors can insist that the changes that they recommend as the result of an operational audit be implemented by the company.

Accepted Answer

A) True 
 B)False

Question 19

Operational audits are primarily geared towards improving a company's operational efficiency and effectiveness.

Accepted Answer

A) True 
 B)False

Question 20

External auditors typically consider internal auditors effective if they meet three criteria.What are these criteria?

Accepted Answer

External auditors typically consider int...

Exam 26: Internal and Governmental Financial Auditing and Operational Auditing

Internal Auditors are expected to add value to the organization through improved operational effectiveness.In addition, their responsibilities include all the following except:

Correct AnswerverifiedC

Operational auditors must accumulate sufficient appropriate evidence to provide a basis for a conclusion about the objectives being tested.

Correct AnswerverifiedShow Answer

An operational auditor may use "engineered standards" as an evaluation criteria.

Correct AnswerverifiedShow Answer

When a state or local government agency receives federal funds, it is subject to the audit requirements of:

Correct AnswerverifiedShow Answer

How do the risk and materiality thresholds change in a government audit compared to a financial statement audit of a public company?

Correct AnswerverifiedThe Yellow Book recognizes that in gover...View AnswerShow Answer

The professional organization which is responsible for providing guidance for internal auditors is the:

Correct AnswerverifiedShow Answer

Independence is a fundamental ethical principle for internal auditors.

Correct AnswerverifiedFalse

Effectiveness is concerned with whether defined goals are achieved, whereas efficiency is concerned with whether the goals are achieved with a minimum use of resources.

Correct AnswerverifiedShow Answer

Statements on Internal Auditing Standards are issued by the:

Correct AnswerverifiedC

Effectiveness refers to the degree to which costs are reduced without reducing efficiency.

Correct AnswerverifiedShow Answer

Benchmarking is one source of evaluation criteria for completing an operational audit.

Correct AnswerverifiedShow Answer

As compared to a financial audit, an operational audit:

Correct AnswerverifiedShow Answer

Discuss each of the three broad categories (types)of operational audits.

Correct Answerverified•Functional.A functional audit deals wit...View AnswerShow Answer

Which of the following is not a similarity between external and internal auditors?

Correct AnswerverifiedShow Answer

Which of the following is not one of the major differences between financial and operational auditing?

Correct AnswerverifiedShow Answer

Which of the following statements regarding types of operational audits is likely incorrect?

Correct AnswerverifiedShow Answer

Government auditing standards are included in the Yellow Book.

Correct AnswerverifiedShow Answer

Auditors can insist that the changes that they recommend as the result of an operational audit be implemented by the company.

Correct AnswerverifiedShow Answer

Operational audits are primarily geared towards improving a company's operational efficiency and effectiveness.

Correct AnswerverifiedShow Answer

External auditors typically consider internal auditors effective if they meet three criteria.What are these criteria?

Correct AnswerverifiedExternal auditors typically consider int...View AnswerShow Answer

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The Yellow Book recognizes that in gover...
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False

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C

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•Functional.A functional audit deals wit...
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External auditors typically consider int...
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