Question 1

Which of the following best describes the scope of internal auditing as it has developed to date?

Accepted Answer

A) Internal auditing involves appraising the economy and efficiency with which resources are employed. 
B) Internal auditing involves evaluating compliance with policies, plans, procedures, laws, and regulations. 
C) Internal auditing has evolved to verifying the existence of assets and reviewing the means of safeguarding assets. 
D) Internal auditing has evolved to more of an operational orientation from a financial orientation. 
A) Internal auditing involves appraising the economy and efficiency with which resources are employed. 
B) Internal auditing involves evaluating compliance with policies, plans, procedures, laws, and regulations. 
C) Internal auditing has evolved to verifying the existence of assets and reviewing the means of safeguarding assets. 
D) Internal auditing has evolved to more of an operational orientation from a financial orientation.

Question 2

Evaluation of internal control is one of the general sections of the IIA's Standards of the Professional Practice of Internal Auditing.

Accepted Answer

A) True 
 B)False

Question 3

In an audit in accordance with the Single Audit Act of 1984,the auditors must test compliance with the significant requirements of all major programs.

Accepted Answer

A) True 
 B)False

Question 4

According to the IIA's Standards,an internal auditor's working papers should be reviewed by the:

Accepted Answer

A) Management of the department being audited. 
B) Management of the internal auditing department. 
C) Audit committee of the board of directors. 
D) Management of the organization's security division. 
A) Management of the department being audited. 
B) Management of the internal auditing department. 
C) Audit committee of the board of directors. 
D) Management of the organization's security division.

Question 5

The primary purpose of the internal auditors' evaluation of internal control is to:

Accepted Answer

A) Determine if management has planned and implemented activities needed to attain goals and objectives. 
B) Determine the extent of tests of controls needed during field work. 
C) Identify areas for fraud investigation. 
D) Determine if employees have incompatible duties that have compromised the control environment. 
A) Determine if management has planned and implemented activities needed to attain goals and objectives. 
B) Determine the extent of tests of controls needed during field work. 
C) Identify areas for fraud investigation. 
D) Determine if employees have incompatible duties that have compromised the control environment.

Question 6

In an audit in accordance Government Auditing Standards,the auditors are required to provide a report on:

Accepted Answer

A) Compliance applicable to major federal programs. 
B) The Schedule of financial assistance received. 
C) Compliance with laws and regulations which are required to be tested by generally accepted auditing standards. 
D) Internal control systems used in administering federal assistance programs. 
A) Compliance applicable to major federal programs. 
B) The Schedule of financial assistance received. 
C) Compliance with laws and regulations which are required to be tested by generally accepted auditing standards. 
D) Internal control systems used in administering federal assistance programs.

Question 7

In an audit in accordance with generally accepted auditing standards,the auditors must test compliance with those laws and regulations that:

Accepted Answer

A) Have a direct and material effect on the financial statements. 
B) Have a direct and material effect on major federal programs. 
C) Have a material direct or indirect effect on the financial statements. 
D) Have a material effect on major or nonmajor programs. 
A) Have a direct and material effect on the financial statements. 
B) Have a direct and material effect on major federal programs. 
C) Have a material direct or indirect effect on the financial statements. 
D) Have a material effect on major or nonmajor programs.

Question 8

In an audit in accordance with Government Auditing Standards,the auditors are required to perform tests beyond those of an audit in accordance with generally accepted auditing standards relating to internal control over major federal assistance programs.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is not one of the attribute standards of the IIA's Standards for the Professional Practice of Internal Auditing?

Accepted Answer

A) Independence and objectivity. 
B) Outsourcing. 
C) Proficiency and professional care. 
D) Purpose, authority, and responsibility. 
A) Independence and objectivity. 
B) Outsourcing. 
C) Proficiency and professional care. 
D) Purpose, authority, and responsibility.

Question 10

Compliance procedures are tests of an organization's controls.

Accepted Answer

A) True 
 B)False

Question 11

Internal auditors are an important part of the internal control structures of all types of organizations.
a.Describe the objectives of an internal auditing function.
b.Explain two ways that internal auditors may maintain independence with respect to the activities that they audit.

Accepted Answer

a.Internal auditing is an independent,ob

Question 12

Many government and nonprofit organizations are required to have an audit in accordance with Government Auditing Standards.
a.Who develops Government Auditing Standards?
b.Describe the requirements of an audit in accordance with Government Auditing Standards.
c.Describe the auditors' responsibilities for testing for compliance with laws and regulations in an audit in accordance with Government Auditing Standards.

Accepted Answer

a.The United States General Accounting O

Question 13

Under the Single Audit Act,the auditor must apply procedures to test for compliance and test the effectiveness of controls for: $$\begin{array} { l c c } 
& \text { Major Programs } & \text { NonMajor Programs } \
\text { A) } & \text { Yes } & \text { Yes } \
\text { B) } & \text { Yes } & \text { No } \
\text { C) } & \text { No } & \text { Yes } \
\text { D) } & \text { No } & \text { No }
\end{array}$$

Accepted Answer

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

Question 14

Requirements of federal financial assistance programs that involve significant national policy are known as:

Accepted Answer

A) Specific requirements. 
B) Major program requirements. 
C) General requirements. 
D) Primary requirements. 
A) Specific requirements. 
B) Major program requirements. 
C) General requirements. 
D) Primary requirements.

Question 15

In planning an operational audit,an on-site survey could assist with all of the following,except:

Accepted Answer

A) Obtaining auditee comments and suggestions on control problems. 
B) Obtaining preliminary information on internal control. 
C) Identifying areas for audit emphasis. 
D) Evaluating the effectiveness of the internal control. 
A) Obtaining auditee comments and suggestions on control problems. 
B) Obtaining preliminary information on internal control. 
C) Identifying areas for audit emphasis. 
D) Evaluating the effectiveness of the internal control.

Question 16

An audit in accordance with the Single Audit Act does not involve reporting upon:

Accepted Answer

A) Compliance with provisions of laws that may have a direct and material affect on each major federal financial assistance program. 
B) Financial statements. 
C) Internal control over operations. 
D) Schedule of expenditures of federal awards. 
A) Compliance with provisions of laws that may have a direct and material affect on each major federal financial assistance program. 
B) Financial statements. 
C) Internal control over operations. 
D) Schedule of expenditures of federal awards.

Question 17

The operational auditors' preliminary conclusions about potential problem areas are summarized as:

Accepted Answer

A) The definition of purpose. 
B) The audit program. 
C) The preliminary survey. 
D) The audit report. 
A) The definition of purpose. 
B) The audit program. 
C) The preliminary survey. 
D) The audit report.

Question 18

In an audit in accordance with Government Auditing Standards,the auditors are required to provide a report on:

Accepted Answer

A) Compliance with general requirements. 
B) The schedule of financial assistance received. 
C) The organization's internal control. 
D) Findings and questioned costs. 
A) Compliance with general requirements. 
B) The schedule of financial assistance received. 
C) The organization's internal control. 
D) Findings and questioned costs.

Question 19

A legal aid society provides free legal aid to low-income individuals with funds passed-through the state welfare department from the U.S.Department of Health and Human Services.In this situation which organization is the primary recipient of the funds?

Accepted Answer

A) The state welfare department. 
B) The Department of Health and Human Services. 
C) The legal aid society. 
D) The individual receiving the aid. 
A) The state welfare department. 
B) The Department of Health and Human Services. 
C) The legal aid society. 
D) The individual receiving the aid.

Question 20

Compliance auditing procedures are:

Accepted Answer

A) Tests of controls. 
B) Observation procedures. 
C) Substantive procedures. 
D) Confirmation procedures. 
A) Tests of controls. 
B) Observation procedures. 
C) Substantive procedures. 
D) Confirmation procedures.

Exam 21: Internal, Operational, and Compliance Auditing

Which of the following best describes the scope of internal auditing as it has developed to date?

Evaluation of internal control is one of the general sections of the IIA's Standards of the Professional Practice of Internal Auditing.

In an audit in accordance with the Single Audit Act of 1984,the auditors must test compliance with the significant requirements of all major programs.

According to the IIA's Standards,an internal auditor's working papers should be reviewed by the:

The primary purpose of the internal auditors' evaluation of internal control is to:

In an audit in accordance Government Auditing Standards,the auditors are required to provide a report on:

In an audit in accordance with generally accepted auditing standards,the auditors must test compliance with those laws and regulations that:

In an audit in accordance with Government Auditing Standards,the auditors are required to perform tests beyond those of an audit in accordance with generally accepted auditing standards relating to internal control over major federal assistance programs.

Which of the following is not one of the attribute standards of the IIA's Standards for the Professional Practice of Internal Auditing?

Compliance procedures are tests of an organization's controls.

Internal auditors are an important part of the internal control structures of all types of organizations. a.Describe the objectives of an internal auditing function. b.Explain two ways that internal auditors may maintain independence with respect to the activities that they audit.

Under the Single Audit Act,the auditor must apply procedures to test for compliance and test the effectiveness of controls for: Major Programs NonMajor Programs A) Yes Yes B) Yes No C) No Yes D) No No

Requirements of federal financial assistance programs that involve significant national policy are known as:

In planning an operational audit,an on-site survey could assist with all of the following,except:

An audit in accordance with the Single Audit Act does not involve reporting upon:

The operational auditors' preliminary conclusions about potential problem areas are summarized as:

In an audit in accordance with Government Auditing Standards,the auditors are required to provide a report on:

A legal aid society provides free legal aid to low-income individuals with funds passed-through the state welfare department from the U.S.Department of Health and Human Services.In this situation which organization is the primary recipient of the funds?

Compliance auditing procedures are:

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of CPAS

Audit Evidence and Documentation

Audit Planning, understanding the Client, assessing Risks, and Responding

Internal Control

Consideration of Internal Control in an Information Technology Environment

Audit Sampling

Cash and Financial Investments

Accounts Receivable, Notes Receivable, and Revenue

Inventories and Cost of Goods Sold

Property Plant and Equipment: Depreciation and Depletion

Accounts Payable and Other Liabilities

Debt and Equity Capital

Auditing Operations and Completing the Audit

Auditors Report

Integrated Audits of Public Companies

Additional Assurance Services: Historical Financial Information

Additional Assurance Services: Other Information

Probability-Proportion-To-Size Sampling

Filters