Question 1

The work of internal auditors may affect the independent auditor's

Accepted Answer

A) procedures performed in obtaining an understanding of the internal control structure and in assessing the risk of material misstatement only. 
B) procedures performed in obtaining an understanding of the internal control structure and substantive tests performed in gathering direct evidence only. 
C) procedures performed in assessing the risk of material misstatement and substantive tests performed in gathering direct evidence only. 
D) procedures performed in obtaining an understanding of the internal control structure and in assessing the risk of material misstatement and substantive tests performed in gathering direct evidence. 
A) procedures performed in obtaining an understanding of the internal control structure and in assessing the risk of material misstatement only. 
B) procedures performed in obtaining an understanding of the internal control structure and substantive tests performed in gathering direct evidence only. 
C) procedures performed in assessing the risk of material misstatement and substantive tests performed in gathering direct evidence only. 
D) procedures performed in obtaining an understanding of the internal control structure and in assessing the risk of material misstatement and substantive tests performed in gathering direct evidence.

Question 2

A governmental auditor assigned to audit the financial statements of the state highway department would not be considered independent if the auditor

Accepted Answer

A) spouse was the CFO of the highway department. 
B) lived in the state and utilized the highway system on a daily basis. 
C) performed audits of the state budget that included funding to the highway department. 
D) reported the audit findings to the transportation committee of the state legislature. 
A) spouse was the CFO of the highway department. 
B) lived in the state and utilized the highway system on a daily basis. 
C) performed audits of the state budget that included funding to the highway department. 
D) reported the audit findings to the transportation committee of the state legislature.

Question 3

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

Accepted Answer

A) preserving the chain of custody of the evidence. 
B) establishing evidential procedure. 
C) marking an evidential exhibit. 
D) forensic auditing. 
A) preserving the chain of custody of the evidence. 
B) establishing evidential procedure. 
C) marking an evidential exhibit. 
D) forensic auditing.

Question 4

Prosecution of fraud perpetrators is advisable because if not prosecuted,they _______________________________,and failure to do so ______________________________________________________.
Question also found in study guide

Accepted Answer

will continue to ste

Question 5

Which of the following would be considered an independence issue for an internal auditor?

Accepted Answer

A) The company decreased every department's budget,including internal audit,by 5%. 
B) The auditors participated in the employee stock plan and,therefore,owned stock in the company. 
C) The CAE reports directly to the audit committee. 
D) The controller had authority to change the audit schedule before being sent to management and the audit committee. 
A) The company decreased every department's budget,including internal audit,by 5%. 
B) The auditors participated in the employee stock plan and,therefore,owned stock in the company. 
C) The CAE reports directly to the audit committee. 
D) The controller had authority to change the audit schedule before being sent to management and the audit committee.

Question 6

The Single Audit Act requires the auditor to report on ____________________ ___________________,___________________________,and ___________________.
Question also found in study guide

Accepted Answer

financial statements

Question 7

Management has instated a new grievance process.When an employee has a grievance a manager,in another department is assigned as an independent mediator to evaluate the employee's complaint.That manager must submit a written report to the Vice President of Human Resources,who must act on the report and discuss the resolution with the employee,the employee's manager,and any other relevant personnel. Management acknowledges that this process will mean that an employee will be paid for several hours of work during the grievance process and several managers will spend time in the process.However,this process will likely reduce employee turnover.
This process has been in place for 18 months.Management wants to know what the costs are for the grievance process and if the new process is achieving the stated objective of reducing employee turnover.What type of audit would internal perform?

Accepted Answer

A) Operational audit. 
B) Governance audit. 
C) Compliance audit. 
D) Performance audit. 
A) Operational audit. 
B) Governance audit. 
C) Compliance audit. 
D) Performance audit.

Question 8

The goal of sustainability auditing is to help managers discharge their management responsibilities and improve profitability.

Accepted Answer

A) True 
 B)False

Question 9

An expert in detecting and investigating fraud is a certified fraud investigator.

Accepted Answer

A) True 
 B)False

Question 10

The GAO Government Auditing Standards requirements for written reports in financial statement audits do not include

Accepted Answer

A) audit report on financial statements. 
B) a report of any significant accomplishments and management improvements. 
C) a report on the auditee's internal control structure and the control risk assessment. 
D) a report on the auditee's compliance with applicable laws and regulations. 
A) audit report on financial statements. 
B) a report of any significant accomplishments and management improvements. 
C) a report on the auditee's internal control structure and the control risk assessment. 
D) a report on the auditee's compliance with applicable laws and regulations.

Question 11

The Government Accountability Office (GAO)is provides auditing standards that are followed by internal auditors and governmental auditors.

Accepted Answer

A) True 
 B)False

Question 12

Your organization has selected you to develop an internal audit activity.Your approach will most likely be to hire

Accepted Answer

A) internal auditors each of whom possess the skills required to handle all engagements. 
B) inexperienced personnel and train them the way the organization wants them trained. 
C) degreed accountants because most internal audit work is accounting related. 
D) internal auditors who collectively have the knowledge and skills needed to perform the responsibilities of the internal audit activities. 
A) internal auditors each of whom possess the skills required to handle all engagements. 
B) inexperienced personnel and train them the way the organization wants them trained. 
C) degreed accountants because most internal audit work is accounting related. 
D) internal auditors who collectively have the knowledge and skills needed to perform the responsibilities of the internal audit activities.

Question 13

The Single Audit Act established an annual audit for all ____________________ and ____________________ units that spend $_____________________ or more of ____________________ funds.
Question also found in study guide

Accepted Answer

state ; lo

Question 14

Which of the following is a requirement of the Standards for the Professional Practice of Internal Audit if the Institute of Internal Auditors (IIA)that is not a requirement of an external auditor performing a financial statement audit?

Accepted Answer

A) Due care. 
B) Internal control evaluation. 
C) Reporting to the audit committee. 
D) Performing a follow-up on audit findings. 
A) Due care. 
B) Internal control evaluation. 
C) Reporting to the audit committee. 
D) Performing a follow-up on audit findings.

Question 15

Forensic accounting is a term used solely to describe work that is performed when evidence of fraud exists in an organization.
Question also found in study guide

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) Prediction. 
B) Suspicion. 
C) Predication. 
D) Admonition. 
A) Prediction. 
B) Suspicion. 
C) Predication. 
D) Admonition.

Question 17

Few fraud auditors believe in the concept of an "immaterial fraud" because ________________________ and ________________________________________.
Question also found in study guide

Accepted Answer

fraud grow

Question 18

In an audit of a municipality the auditor is most important audit objective is

Accepted Answer

A) the municipality is in compliance with laws,regulations,and the municipality's policy and procedures. 
B) the municipality's internal controls are operating effectively. 
C) the municipality as sufficient documentation to support all purchases. 
D) purchases made by the municipality have sufficient encumbrances. 
A) the municipality is in compliance with laws,regulations,and the municipality's policy and procedures. 
B) the municipality's internal controls are operating effectively. 
C) the municipality as sufficient documentation to support all purchases. 
D) purchases made by the municipality have sufficient encumbrances.

Question 19

Which of the following internal audits is generally not a type of government audit?

Accepted Answer

A) Review of compliance with policies,plans,procedures,laws,and regulations. 
B) Review of the economy and efficiency in the use of resources. 
C) Review of the means of safeguarding assets. 
D) Review of the results of programs. 
A) Review of compliance with policies,plans,procedures,laws,and regulations. 
B) Review of the economy and efficiency in the use of resources. 
C) Review of the means of safeguarding assets. 
D) Review of the results of programs.

Question 20

GAO performs three types of government audits: ___________________,____________________ and ____________________ audits.
Question also found in study guide

Accepted Answer

financial

The work of internal auditors may affect the independent auditor's

A governmental auditor assigned to audit the financial statements of the state highway department would not be considered independent if the auditor

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

Prosecution of fraud perpetrators is advisable because if not prosecuted,they _,and failure to do so ________________________. Question also found in study guide

Which of the following would be considered an independence issue for an internal auditor?

The Single Audit Act requires the auditor to report on __________ _,_,and _. Question also found in study guide

The goal of sustainability auditing is to help managers discharge their management responsibilities and improve profitability.

An expert in detecting and investigating fraud is a certified fraud investigator.

The GAO Government Auditing Standards requirements for written reports in financial statement audits do not include

The Government Accountability Office (GAO)is provides auditing standards that are followed by internal auditors and governmental auditors.

Your organization has selected you to develop an internal audit activity.Your approach will most likely be to hire

The Single Audit Act established an annual audit for all __________ and units that spend $_ or more of __________ funds. Question also found in study guide

Which of the following is a requirement of the Standards for the Professional Practice of Internal Audit if the Institute of Internal Auditors (IIA)that is not a requirement of an external auditor performing a financial statement audit?

Forensic accounting is a term used solely to describe work that is performed when evidence of fraud exists in an organization. Question also found in study guide

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

Few fraud auditors believe in the concept of an "immaterial fraud" because and ________________. Question also found in study guide

In an audit of a municipality the auditor is most important audit objective is

Which of the following internal audits is generally not a type of government audit?

GAO performs three types of government audits: _, and __ audits. Question also found in study guide

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Exam 16: Internal Audits, Governmental Audits, and Fraud Examinations

The work of internal auditors may affect the independent auditor's

A governmental auditor assigned to audit the financial statements of the state highway department would not be considered independent if the auditor

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

Prosecution of fraud perpetrators is advisable because if not prosecuted,they _______________________________,and failure to do so ______________________________________________________. Question also found in study guide

Which of the following would be considered an independence issue for an internal auditor?

The Single Audit Act requires the auditor to report on ____________________ ___________________,___________________________,and ___________________. Question also found in study guide

The goal of sustainability auditing is to help managers discharge their management responsibilities and improve profitability.

An expert in detecting and investigating fraud is a certified fraud investigator.

The GAO Government Auditing Standards requirements for written reports in financial statement audits do not include

The Government Accountability Office (GAO)is provides auditing standards that are followed by internal auditors and governmental auditors.

Your organization has selected you to develop an internal audit activity.Your approach will most likely be to hire

The Single Audit Act established an annual audit for all ____________________ and ____________________ units that spend $_____________________ or more of ____________________ funds. Question also found in study guide

Which of the following is a requirement of the Standards for the Professional Practice of Internal Audit if the Institute of Internal Auditors (IIA)that is not a requirement of an external auditor performing a financial statement audit?

Forensic accounting is a term used solely to describe work that is performed when evidence of fraud exists in an organization. Question also found in study guide

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

Few fraud auditors believe in the concept of an "immaterial fraud" because ________________________ and ________________________________________. Question also found in study guide

In an audit of a municipality the auditor is most important audit objective is

Which of the following internal audits is generally not a type of government audit?

GAO performs three types of government audits: ___________________,____________________ and ____________________ audits. Question also found in study guide

Auditing and Assurance Services

Professional Standards

Engagement Planning

Management Fraud and Audit Risk

Risk Assessment: Internal Control Evaluation

Employee Fraud and the Audit of Cash

Revenue and Collection Cycle

Acquisition and Expenditure Cycle

Production Cycle

Finance and Investment Cycle

Completing the Audit

Reports on Audited Financial Statements

Other Public Accounting Services

Professional Ethics

Legal Liability

Overview of Sampling

Attributes Sampling

Variables Sampling

Auditing and Information Technology

Filters

Prosecution of fraud perpetrators is advisable because if not prosecuted,they _,and failure to do so ________________________. Question also found in study guide

The Single Audit Act requires the auditor to report on __________ _,_,and _. Question also found in study guide

The Single Audit Act established an annual audit for all __________ and units that spend $_ or more of __________ funds. Question also found in study guide

Few fraud auditors believe in the concept of an "immaterial fraud" because and ________________. Question also found in study guide

GAO performs three types of government audits: _, and __ audits. Question also found in study guide