Question 1

One disadvantage of functional auditing is the failure to evaluate interrelated functions.

Accepted Answer

A) True 
 B)False  True

Question 2

Internal audit reports are standardized, as the reporting needs are standardized from company to company.

Accepted Answer

A) True 
 B)False  False

Question 3

Name three expectations of today's internal auditors.

Accepted Answer

Providing value through improved operational effectiveness; reviewing the reliability and the integrity of information; ensuring compliance with policies and regulations; safeguarding company assets.

Question 4

Internal audit reports are relied on by both internal and external users.

Accepted Answer

A) True 
 B)False

Question 5

The correct title of the Yellow Book is

Accepted Answer

A)  Government Auditing Standards. 
B)  Institute of Internal Auditors (II
A)  Practice Standards. 
C)  Statement of Responsibilities of Internal Auditing. 
D)  Statement of Standards on Accounting and Review Services. 
A)  Government Auditing Standards. 
B)  Institute of Internal Auditors (II
A)  Practice Standards. 
C)  Statement of Responsibilities of Internal Auditing. 
D)  Statement of Standards on Accounting and Review Services.

Question 6

Which of the following is not a purpose of a program audit as performed by government auditors?

Accepted Answer

A)  determination of the extent to which the desired results established by the legislature are being achieved 
B)  determination of the causes of inefficiencies in sponsored programs 
C)  determination of the effectiveness of organizations, programs, activities, or functions 
D)  determination as to whether the entity has complied with laws and regulations applicable to the program 
A)  determination of the extent to which the desired results established by the legislature are being achieved 
B)  determination of the causes of inefficiencies in sponsored programs 
C)  determination of the effectiveness of organizations, programs, activities, or functions 
D)  determination as to whether the entity has complied with laws and regulations applicable to the program

Question 7

As compared to a financial audit, an operational audit:

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 8

Internal auditing standards are included in the Blue Book.

Accepted Answer

A) True 
 B)False

Question 9

Because they spend all their time within one company, internal auditors have much greater knowledge about the company's operations and internal controls then external auditors.

Accepted Answer

A) True 
 B)False

Question 10

Under the International Standards for the Professional Practice of Internal Auditing, the performance standards deal with the education requirements of the internal auditor.

Accepted Answer

A) True 
 B)False

Question 11

3478277
-the official title of the Yellow Book

Accepted Answer

A) compliance audit 
B) economy and efficiency audit 
C) effectiveness 
D) efficiency 
E) functional audit
F)Government Auditing Standards
G)government audit
H)Institute of Internal Auditors
I)operational auditing
J)organizational audit
K)program audit
L)Single Audit Act
M)special assignment
N)IIA Practice Standards 
A) compliance audit 
B) economy and efficiency audit 
C) effectiveness 
D) efficiency 
E) functional audit
F)Government Auditing Standards
G)government audit
H)Institute of Internal Auditors
I)operational auditing
J)organizational audit
K)program audit
L)Single Audit Act
M)special assignment
N)IIA Practice Standards

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  Both must be performed by a CPA. 
B)  Operational audit reports are usually of a restricted distribution while financial audit reports are widely distributed. 
C)  Operational audits often cover nonfinancial issues while financial audits do not. 
D)  None of the above is a difference. 
A)  Both must be performed by a CPA. 
B)  Operational audit reports are usually of a restricted distribution while financial audit reports are widely distributed. 
C)  Operational audits often cover nonfinancial issues while financial audits do not. 
D)  None of the above is a difference.

Question 16

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)  require 
D)  permit 
A)  discourage 
B)  prohibit 
C)  require 
D)  permit

Question 17

Which of the following groups could be involved in an operational audit?

Accepted Answer

A)  CPA firms 
B)  internal auditors 
C)  government auditors 
D)  All of the above could be involved. 
A)  CPA firms 
B)  internal auditors 
C)  government auditors 
D)  All of the above could be involved.

Question 18

The two most important qualities for an operational auditor to possess are independence and competence.

Accepted Answer

A) True 
 B)False

Question 19

An audit designed to provide reasonable assurance of detecting material misstatements resulting from noncompliance with provisions of contracts or grant agreements that have a material and direct effect on the financial statements would be called a(n)

Accepted Answer

A)  performance audit. 
B)  management audit. 
C)  operational audit. 
D)  compliance audit. 
A)  performance audit. 
B)  management audit. 
C)  operational audit. 
D)  compliance audit.

Question 20

What distinguishes internal control evaluation and testing for financial and operational auditing?

Accepted Answer

A)  purpose of the work 
B)  scope of the work 
C)  both A and B 
D)  neither A nor B 
A)  purpose of the work 
B)  scope of the work 
C)  both A and B 
D)  neither A nor B

Exam 26: Internal and Governmental Financial Auditing and Operational Auditing

One disadvantage of functional auditing is the failure to evaluate interrelated functions.

Internal audit reports are standardized, as the reporting needs are standardized from company to company.

Name three expectations of today's internal auditors.

Internal audit reports are relied on by both internal and external users.

The correct title of the Yellow Book is

Which of the following is not a purpose of a program audit as performed by government auditors?

As compared to a financial audit, an operational audit:

Internal auditing standards are included in the Blue Book.

Because they spend all their time within one company, internal auditors have much greater knowledge about the company's operations and internal controls then external auditors.

Under the International Standards for the Professional Practice of Internal Auditing, the performance standards deal with the education requirements of the internal auditor.

3478277 -the official title of the Yellow Book

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

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

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

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

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

Which of the following groups could be involved in an operational audit?

The two most important qualities for an operational auditor to possess are independence and competence.

An audit designed to provide reasonable assurance of detecting material misstatements resulting from noncompliance with provisions of contracts or grant agreements that have a material and direct effect on the financial statements would be called a(n)

What distinguishes internal control evaluation and testing for financial and operational auditing?

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 Materiality

Assessing the Risk of Material Misstatement

Fraud Auditing

Internal Control and Coso Framework

Assessing Control Risk and Reporting on Internal Controls

Overall Audit Strategy and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls

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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