Question 1

The primary source of authoritative literature for doing government audits is the:

Accepted Answer

A)  Purple Book. 
B)  Yellow Book. 
C)  Green Book. 
D)  Red Book. 
A)  Purple Book. 
B)  Yellow Book. 
C)  Green Book. 
D)  Red Book. B

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  True

Question 3

Internal auditing standards are included in the Blue Book.

Accepted Answer

A) True 
 B)False  False

Question 4

What are three similarities between internal and external auditors?

Accepted Answer

•Both must be competent as auditors and

Question 5

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 non-financial 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 non-financial issues while financial audits do not. 
D)  None of the above is a difference.

Question 6

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 7

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 8

An audit conducted in accordance with the Yellow Book must include an audit report that states the audit was performed in accordance with:

Accepted Answer

A)  GAAS. 
B)  GAGAS. 
C)  GASA. 
D)  SAS. 
A)  GAAS. 
B)  GAGAS. 
C)  GASA. 
D)  SAS.

Question 9

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

Question 10

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 11

The Single Audit Act requires that an audit be conducted for recipients who receive total federal funds in any fiscal year of:

Accepted Answer

A)  $1,000,000 or more. 
B)  $500,000 or more. 
C)  $300,000 or more. 
D)  $100,000 or more. 
A)  $1,000,000 or more. 
B)  $500,000 or more. 
C)  $300,000 or more. 
D)  $100,000 or more.

Question 12

Discuss three major differences between operational and financial auditing.

Accepted Answer

•Purpose of the audit.Financial auditing

Question 13

Discuss each of the three phases of an operational audit.

Accepted Answer

•Planning.In the planning phase,the audi

Question 14

Operational auditing is the review of an organization for efficiency and effectiveness.Discuss what is meant by the terms "effectiveness" and "efficiency."

Accepted Answer

•Effectiveness refers to the d

Question 15

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

Accepted Answer

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

Question 16

The international standards for the professional practice of internal auditing include which two categories of standards?

Accepted Answer

A)  Attribute and performance 
B)  Competency and professional skepticism 
C)  Performance and integrity 
D)  Ethics and rules of conduct 
A)  Attribute and performance 
B)  Competency and professional skepticism 
C)  Performance and integrity 
D)  Ethics and rules of conduct

Question 17

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 18

The objectives of internal auditors are considerably broader than the objectives of external auditors.

Accepted Answer

A) True 
 B)False

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 26: Internal and Governmental Financial Auditing and Operational Auditing

The primary source of authoritative literature for doing government audits is the:

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

Internal auditing standards are included in the Blue Book.

What are three similarities between internal and external auditors?

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

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

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

An audit conducted in accordance with the Yellow Book must include an audit report that states the audit was performed in accordance with:

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

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

The Single Audit Act requires that an audit be conducted for recipients who receive total federal funds in any fiscal year of:

Discuss three major differences between operational and financial auditing.

Discuss each of the three phases of an operational audit.

Operational auditing is the review of an organization for efficiency and effectiveness.Discuss what is meant by the terms "effectiveness" and "efficiency."

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

The international standards for the professional practice of internal auditing include which two categories of standards?

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

The objectives of internal auditors are considerably broader than the objectives of external auditors.

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

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

The Assurance Services Market

The Audit Standards Setting Process

Audit Reports

Legal Liability Considerations for Auditors

Ethics and the Audit Profession

Audit Responsibilities and Objectives

Nature and Type of Audit Evidence

Audit Planning

Considering Materiality and Audit Risk

Considering Internal Control

Considering the Risk of Fraud

Implications of Information Technology for the Audit Process

Developing the Overall Audit Plan 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 Inventory and Warehousing Cycle

Audit of the Payroll and Personnel Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash and Financial Instruments

Audit Completion

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