Question 1

The Institute of Internal Auditors has established Ethical Principles for its members.List each of the principles.

Accepted Answer

The IIA's ethical pr

Question 2

In addition to an opinion on whether the financial statements are in accordance with GAAP, identify four other reports required by the OMB Circular A-133.

Accepted Answer

The following reports are required:
•An

Question 3

Discuss each of the three phases of an operational audit.

Accepted Answer

•Planning.In the planning phase, the aud

Question 4

Which of the following is not one of the three phases in an operational audit?

Accepted Answer

A) Planning 
B) Training and supervising employees 
C) Evidence accumulation and evaluation 
D) Reporting and follow-up 
A) Planning 
B) Training and supervising employees 
C) Evidence accumulation and evaluation 
D) Reporting and follow-up

Question 5

Discuss three major differences between operational and financial auditing.

Accepted Answer

•Purpose of the audit.Financial auditing

Question 6

Internal auditors are responsible to:

Accepted Answer

A) the board of directors. 
B) management. 
C) both A and B. 
D) neither A nor B. 
A) the board of directors. 
B) management. 
C) both A and B. 
D) neither A nor B.

Question 7

Operational audits are often categorized as functional, organizational, or special assignments.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is most correct with regard to the comparison of the financial auditing standards of the Yellow Book with the principles of the AICPA auditing standards?

Accepted Answer

A) The same as 
B) Quite different from 
C) Incompatible with 
D) Consistent with 
A) The same as 
B) Quite different from 
C) Incompatible with 
D) Consistent with

Question 9

Which of the following best describes an audit that emphasizes how efficiently and effectively functions interact?

Accepted Answer

A) Operational 
B) Compliance 
C) Financial 
D) Organizational 
A) Operational 
B) Compliance 
C) Financial 
D) Organizational

Question 10

Efficiency refers to the degree to which costs are reduced without changing effectiveness.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) Purpose of the audit 
B) Distribution of the report 
C) Testing the effectiveness of internal controls 
D) Inclusion of nonfinancial areas 
A) Purpose of the audit 
B) Distribution of the report 
C) Testing the effectiveness of internal controls 
D) Inclusion of nonfinancial areas

Question 12

The formal name of the Yellow Book is Government Auditing Standards.

Accepted Answer

A) True 
 B)False

Question 13

Effective internal controls are designed to help organizations achieve which of the following objectives?

Accepted Answer

A) Reliability of financial reporting 
B) Efficiency and effectiveness of operations 
C) Compliance with applicable laws and regulations 
D) All of the above 
A) Reliability of financial reporting 
B) Efficiency and effectiveness of operations 
C) Compliance with applicable laws and regulations 
D) All of the above

Question 14

For financial auditing, the audit report typically goes to many users of financial statements, whereas operational audit reports are intended primarily for management.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is most correct regarding external auditors use of internal auditors directly on the audit engagement?

Accepted Answer

A) Discourage 
B) Prohibit 
C) Encourage 
D) Permit 
A) Discourage 
B) Prohibit 
C) Encourage 
D) Permit

Question 16

Match between columns
                        Premises: Statements issued by the Internal Auditing Standards Board of the IIA to provide authoritative interpretation of the IIA Practice Standards.
The review of an organization for efficiency and effectiveness.
The official title of the Yellow Book.
Federal legislation that provides for a single coordinated audit to satisfy the audit requirements of all federal funding agencies.
The degree to which the organization's objectives are accomplished.
A government audit to determine whether an entity is acquiring protecting and using its resources economically and efficiently and whether the entity has complied with laws and regulations concerning such matters.
A management request for an operational audit for a specific purpose such as investigating the possibility of fraud in a division or making recommendations for reducing the cost of a manufactured product.

Accepted Answer

The Answer of Effectiveness and IIA Practice Standards and Institute is...

Question 17

Professional guidelines for performing internal audits for companies are not as well-defined as for external audits.

Accepted Answer

A) True 
 B)False

Question 18

The "Red Book" specifies all auditing standards issued by the U.S.General Accounting Office.

Accepted Answer

A) True 
 B)False

Question 19

When performing an operational audit, the internal audit team must first determine that:

Accepted Answer

A) a financial audit has been performed by an independent auditor. 
B) a financial audit has been performed by an internal auditor. 
C) a review was performed by either an independent or an internal auditor. 
D) specific criteria are developed to define effectiveness. 
A) a financial audit has been performed by an independent auditor. 
B) a financial audit has been performed by an internal auditor. 
C) a review was performed by either an independent or an internal auditor. 
D) specific criteria are developed to define effectiveness.

Question 20

Current professional auditing standards prohibit external auditors from using internal auditors for direct assistance on external audits.

Accepted Answer

A) True 
 B)False

Exam 26: Internal and Governmental Financial Auditing and Operational Auditing

The Institute of Internal Auditors has established Ethical Principles for its members.List each of the principles.

In addition to an opinion on whether the financial statements are in accordance with GAAP, identify four other reports required by the OMB Circular A-133.

Discuss each of the three phases of an operational audit.

Which of the following is not one of the three phases in an operational audit?

Discuss three major differences between operational and financial auditing.

Internal auditors are responsible to:

Operational audits are often categorized as functional, organizational, or special assignments.

Which of the following is most correct with regard to the comparison of the financial auditing standards of the Yellow Book with the principles of the AICPA auditing standards?

Which of the following best describes an audit that emphasizes how efficiently and effectively functions interact?

Efficiency refers to the degree to which costs are reduced without changing effectiveness.

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

The formal name of the Yellow Book is Government Auditing Standards.

Effective internal controls are designed to help organizations achieve which of the following objectives?

For financial auditing, the audit report typically goes to many users of financial statements, whereas operational audit reports are intended primarily for management.

Which of the following is most correct regarding external auditors use of internal auditors directly on the audit engagement?

Professional guidelines for performing internal audits for companies are not as well-defined as for external audits.

The "Red Book" specifies all auditing standards issued by the U.S.General Accounting Office.

When performing an operational audit, the internal audit team must first determine that:

Current professional auditing standards prohibit external auditors from using internal auditors for direct assistance on external audits.

The Demand for Audit and Other Assurance Services

The Cpa Profession

Audit Reports

Professional Ethics

Legal Liability

Audit Responsibilities and Objectives

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Internal Control, Control Risk, and Section 404 Audits

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details of Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls, Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Payroll and Personnel Cycle

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Completing the Audit

Other Assurance Services

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