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1 | |
Independence of the internal auditors would be least likely if internal auditors report to the? |
| | A) | President. |
| | B) | Controller. |
| | C) | Audit Committee. |
| | D) | The Board of Directors. |
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2 | |
Lydia previously worked in accounts payable before transferring to internal audit. She has been assigned to do some testing in the accounts payable because of familiarity with that department. Which of the following is the best response to this situation? |
| | A) | The assignment makes good sense because of her expertise. |
| | B) | She should not audit this function, since she may be reviewing some of her own previous work. |
| | C) | The assignment should only be made if she works under a supervisor. |
| | D) | Lydia should have not transferred to internal audit since she previously worked in operations. |
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3 | |
In performing an operational audit, internal auditors are most likely to focus upon which of the following attributes? |
| | A) | Controls relating to the adequacy of the financial statements. |
| | B) | All controls and not just those relating to financial statements. |
| | C) | Efficiency of operations. |
| | D) | Operations of the business, including efficiency, effectiveness, internal control and others. |
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4 | |
The primary difference between an operational audit and a compliance audit is which of the following? |
| | A) | An operational audit focuses on business efficiencies and effectiveness, while a compliance audit focuses on whether laws and other requirements are being followed. |
| | B) | An operational audit focuses on reliability of the financial statements, while a compliance audit focuses on whether laws and other requirements are being followed. |
| | C) | An operational audit focuses on business efficiencies and effectiveness, while a compliance audit focuses on reliability of the financial statements. |
| | D) | A compliance audit focuses on business efficiencies and effectiveness, while a operational audit focuses on whether laws and other requirements are being followed. |
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5 | |
The enactment of large federal government financial assurance programs increased the demand for which type of audit? |
| | A) | Operational. |
| | B) | Objectives based. |
| | C) | Compliance. |
| | D) | Financial Statement. |
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6 | |
What is the final step that should be undertaken in an operational audit? |
| | A) | Reporting of the findings. |
| | B) | Follow-up procedures to determine if recommendations have been implemented. |
| | C) | Report on the organization's internal control and compliance with legal requirements. |
| | D) | An operational meeting with Board of Directors. |
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7 | |
Which of the following of the standards of professional practice for internal auditors does not have a similar standard in the GAAS for independent auditors? |
| | A) | Professional proficiency. |
| | B) | Independence. |
| | C) | Scope of work. |
| | D) | Performance of audit work. |
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8 | |
Which of the following is not a report that external auditors would issue for an audit based upon Governmental Auditing Standards? |
| | A) | An opinion on the financial statements. |
| | B) | A compliance report. |
| | C) | An operational report. |
| | D) | A report on internal control. |
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9 | |
In the compliance audit of Yahoo City, the auditors found a material instance of noncompliance. After reporting this to the Mayor and City Counsel, the appropriate measures were taken to correct the problem. What is the auditors responsibility with respect to reporting the noncompliance? |
| | A) | If the city takes the appropriate action, no modification of the of the report need to be made. |
| | B) | An qualified opinion should be issued. |
| | C) | An adverse opinion should be issued. |
| | D) | A modified report must be issued describing the noncompliance. |
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10 | |
Which report is most likely to result from an audit in conformity with government auditing standards? |
| | A) | Internal control over financial reporting. |
| | B) | Internal control over compliance. |
| | C) | Internal control over personnel. |
| | D) | Internal control over operations. |
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