Question 1

The Single Audit Act applies only to audits of state and local governments.

Accepted Answer

A) True 
 B)False

Question 2

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 3

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 4

Internal auditors do not have the same amount of knowledge about internal controls and the company's operations as the external auditors do.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

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. 
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.

Question 7

3478277
-the degree to which the organization's objectives are accomplished

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 8

Government Auditing Standards recognize that because of public accountability over governmental activities the acceptable tolerable misstatement as compared to commercial businesses may be

Accepted Answer

A)  equal. 
B)  lower. 
C)  higher. 
D)  indeterminable. 
A)  equal. 
B)  lower. 
C)  higher. 
D)  indeterminable.

Question 9

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

Accepted Answer

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

Question 10

3478277
-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

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 11

________ is the degree to which the organization's objectives are accomplished.

Accepted Answer

A)  Effectiveness 
B)  Efficiency 
C)  Goal optimization 
D)  Performance 
A)  Effectiveness 
B)  Efficiency 
C)  Goal optimization 
D)  Performance

Question 12

Unlike financial statement auditors, operational auditors cannot benefit from the use of data analytical tools to identify opportunities for improvements in operational efficiency and effectiveness.

Accepted Answer

A) True 
 B)False

Question 13

Operational audits may be performed by internal auditors and government auditors, but not by external auditors.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

External auditors typically consider int

Question 15

Companies employ their own internal auditors to perform operational auditing, but not financial auditing.

Accepted Answer

A) True 
 B)False

Question 16

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 17

Which of the following can affect the independence of operational auditors?

Accepted Answer

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

Question 18

A typical objective of an operational audit is to determine whether an entity's

Accepted Answer

A)  internal control is adequately operating as designed. 
B)  financial statements present fairly the results of operations. 
C)  specific operating units are functioning efficiently and effectively. 
D)  operational information is in accordance with generally accepted government auditing standards. 
A)  internal control is adequately operating as designed. 
B)  financial statements present fairly the results of operations. 
C)  specific operating units are functioning efficiently and effectively. 
D)  operational information is in accordance with generally accepted government auditing standards.

Exam 26: Internal and Governmental Financial Auditing and Operational Auditing

The Single Audit Act applies only to audits of state and local governments.

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 best describes an audit that emphasizes how efficiently and effectively functions interact?

Internal auditors do not have the same amount of knowledge about internal controls and the company's operations as the external auditors do.

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

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

3478277 -the degree to which the organization's objectives are accomplished

Government Auditing Standards recognize that because of public accountability over governmental activities the acceptable tolerable misstatement as compared to commercial businesses may be

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

3478277 -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

________ is the degree to which the organization's objectives are accomplished.

Unlike financial statement auditors, operational auditors cannot benefit from the use of data analytical tools to identify opportunities for improvements in operational efficiency and effectiveness.

Operational audits may be performed by internal auditors and government auditors, but not by external auditors.

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

Companies employ their own internal auditors to perform operational auditing, but not financial auditing.

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

Which of the following can affect the independence of operational auditors?

A typical objective of an operational audit is to determine whether an entity's

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

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