Exam 16: Internal Governmental and Fraud Audits

What are the different types of government audits?

External auditors accepting engagements to audit federal grants and programs must follow both GAAS and the GAO standards.

How do government auditors achieve objectivity?

Generally,fraud examiners are called when a fraud is already known or suspected.The term that means a reason to believe a fraud has occurred is

The federal law that established uniform requirements for audits of federal assistance provided to state and local governments is called

Which of the following statements is a standard applicable to financial statement audits in accordance with government auditing standards?

The Standards for the Professional Practice of Internal Auditing of the Institute of Internal Auditors (IIA)does not include the broad category of

Which of the following would be considered in determining whether an internal audit department is independent?

When considering the competence of internal auditors,external auditors should obtain evidence about the

Which of the following auditors is responsible for designing and planning an audit to detect material illegal acts and frauds?

In an internal auditor's report,audit findings would include all of the following except

Internal auditors should be independent when obtaining evidence in the sense of being free from direction or constraint by the manager of the business unit under audit.

The IIA auditing standards are classified into three major categories: ___________________,___________________,and _____________________________.

The Single Audit Act established an annual audit for all ____________________ and ____________________ units that spend $_____________________ or more of ____________________ funds.

A reason to believe that a fraud has occurred is called

Which of the following would you not expect to see in an auditor's report(s)on the financial statements of an independent government agency?

During the audit of a corporation's major division,an auditor interviewed an accounting clerk.The clerk told the auditor that she believes that the division has been capitalizing research and development expenses (GAAP requires that all R&D costs be charged to ordinary expense in the period in which they are incurred).R&D is a significant part of the division's budget.If this information is found to be true,the division may have to expense millions of dollars previously capitalized and significantly reduce its operating profit.The auditor has not performed any testing to determine whether this problem actually exists but has discussed the potential problem with the division controller and you,the director of internal audit. The following day,you received the following e-mail from the company president: The controller of Division B informs me that you have discovered a questionable account classification dealing with research and development expense.I am aware of the issue.You are directed to discontinue any further investigation of this matter until I inform you to proceed.Under the confidentiality standard of your profession,I also direct you not to discuss this matter with other managers,the audit committee,or the outside auditors. As the director of internal audit,write a short memo in response to the president's e-mail.Be sure to explain the position you are taking and why this position is appropriate.

Few fraud auditors believe in the concept of an "immaterial fraud" because ________________________ and ________________________________________.

When performing a fraud examination,the fraud examiner takes great care to preserve and identify any documents that may indicate fraud,which is called

Internal auditing is an independent,objective assurance and consulting activity designed to add value and improve an organization's operations.