Question 1

Operational audits are primarily concerned with whether an organization follows appropriate laws and regulations.

Accepted Answer

A) True 
 B)False

Question 2

The passage of the Foreign Corrupt Practices Act increased the demand for internal auditing.

Accepted Answer

A) True 
 B)False

Question 3

The GAO standards of reporting for governmental financial audits incorporate the AICPA standards of reporting and prescribe supplemental standards to satisfy the unique needs of governmental audits. Which of the following is a supplemental reporting standard for audits in accordance with Government Auditing Standards?

Accepted Answer

A)  A report on the entity's internal control. 
B)  Material indications of illegal acts should be reported in a document with distribution restricted to senior officials of the entity audited. 
C)  Instances of abuse, fraud, mismanagement, and waste should be reported to the organization with legal oversight authority over the entity audited. 
D)  All privileged and confidential information discovered should be reported to the senior officials of the organization that arranged for the audit. 
A)  A report on the entity's internal control. 
B)  Material indications of illegal acts should be reported in a document with distribution restricted to senior officials of the entity audited. 
C)  Instances of abuse, fraud, mismanagement, and waste should be reported to the organization with legal oversight authority over the entity audited. 
D)  All privileged and confidential information discovered should be reported to the senior officials of the organization that arranged for the audit.

Question 4

The first internal auditors were primarily concerned with operational auditing.

Accepted Answer

A) True 
 B)False

Question 5

Among the Dodd-Frank Wall Street Reform and Consumer Protection Act's requirements is one requiring:

Accepted Answer

A)  CPA examinations of broker-dealer internal control over compliance. 
B)  Quarterly reporting by all SEC registrants. 
C)  CPA audit of SEC registrant interim statements. 
D)  Severe penalties for companies implementing more than one questionable act reporting channel. 
A)  CPA examinations of broker-dealer internal control over compliance. 
B)  Quarterly reporting by all SEC registrants. 
C)  CPA audit of SEC registrant interim statements. 
D)  Severe penalties for companies implementing more than one questionable act reporting channel.

Question 6

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 7

When performing an audit of a city in accordance with the Single Audit Act, an auditor should adhere to:

Accepted Answer

A)  Standards for the Professional Practice of Internal Auditing. 
B)  Government Auditing Standards. 
C)  Operational Auditing Standards. 
D)  Financial Accounting Standards. 
A)  Standards for the Professional Practice of Internal Auditing. 
B)  Government Auditing Standards. 
C)  Operational Auditing Standards. 
D)  Financial Accounting Standards.

Question 8

Internal auditing is considered to be part of an organization's:

Accepted Answer

A)  Accounting system. 
B)  Control activities. 
C)  Monitoring. 
D)  External controls. 
A)  Accounting system. 
B)  Control activities. 
C)  Monitoring. 
D)  External controls.

Question 9

Kent is auditing an entity's compliance with requirements governing a major federal financial assistance program in accordance with the Single Audit Act. Kent detected noncompliance with requirements that have a material effect on that program. Kent's report on compliance should express a(an):

Accepted Answer

A)  Unqualified opinion with a separate explanatory paragraph. 
B)  Qualified opinion or an adverse opinion. 
C)  Adverse opinion or a disclaimer of opinion. 
D)  Limited assurance on the items tested. 
A)  Unqualified opinion with a separate explanatory paragraph. 
B)  Qualified opinion or an adverse opinion. 
C)  Adverse opinion or a disclaimer of opinion. 
D)  Limited assurance on the items tested.

Question 10

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 11

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

Question 12

Costs paid with federal assistance that appear to be in violation of a law or regulation are known as:

Accepted Answer

A)  Questioned costs. 
B)  Noncompliance costs. 
C)  Improper costs. 
D)  Illegal costs. 
A)  Questioned costs. 
B)  Noncompliance costs. 
C)  Improper costs. 
D)  Illegal costs.

Question 13

In an audit in accordance with 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 14

When auditing an entity's financial statements in accordance with Government Auditing Standards (the "Yellow Book"), an auditor is required to report on:
I. Noteworthy accomplishments of the program.
II. The scope of the auditor's testing of internal controls.

Accepted Answer

A)  I only. 
B)  II only. 
C)  Both I and II. 
D)  Neither I nor II. 
A)  I only. 
B)  II only. 
C)  Both I and II. 
D)  Neither I nor II.

Question 15

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 16

The work of internal auditors is primarily for the benefit of management and the board of directors.

Accepted Answer

A) True 
 B)False

Question 17

The scope of an internal audit is initially defined by the:

Accepted Answer

A)  Audit objectives. 
B)  Scheduling and time estimates. 
C)  Preliminary survey. 
D)  Audit program. 
A)  Audit objectives. 
B)  Scheduling and time estimates. 
C)  Preliminary survey. 
D)  Audit program.

Question 18

Interviewing operating personnel, identifying the objectives of the auditee, identifying standards used to evaluate performance, and assessing the risk inherent in the auditee's operations are activities typically performed in which phase of an internal audit?

Accepted Answer

A)  The fieldwork phase. 
B)  The preliminary survey phase. 
C)  The audit programming phase. 
D)  The reporting phase. 
A)  The fieldwork phase. 
B)  The preliminary survey phase. 
C)  The audit programming phase. 
D)  The reporting phase.

Question 19

An operational audit report which deals with the scrap disposal function in a manufacturing company is most likely to address:

Accepted Answer

A)  The efficiency and effectiveness of the scrap disposal function and include any findings requiring corrective action. 
B)  Whether the scrap material inventory is reported as a current asset. 
C)  Whether the physical inventory count of the scrap material agrees with the recorded amount. 
D)  Whether the scrap materials inventory is valued at the lower of cost or market. 
A)  The efficiency and effectiveness of the scrap disposal function and include any findings requiring corrective action. 
B)  Whether the scrap material inventory is reported as a current asset. 
C)  Whether the physical inventory count of the scrap material agrees with the recorded amount. 
D)  Whether the scrap materials inventory is valued at the lower of cost or market.

Question 20

Governmental entities and other recipients of governmental financial assistance, depending upon the circumstances, may be subject to an audit in accordance with generally accepted auditing standards (GAAS audit), Government Auditing Standards (GAS audit) and the Federal Single Audit Act (Single Audit Act audit). Place an X by the proper reports issued by auditors for each of these audits on the following: $$\begin{array} { | l | l | l | l } 
\hline \text { Reports issued } & \text { GAAS } & \text { GAS Audit } & \begin{array} { c } 
\text { Single } \
\text { AuditAct } \
\text {  }
\end{array} \
\text { } & \text { Aucit } \
\hline \text { Opinion on financial statements. } & & & \
\hline \text { Report of findings and questioned costs. } & & & \
\hline \begin{array} { l } 
\text { Summary report of audit results relating to financial } \
\text { statements, internal control, and compliance. }
\end{array} & & & \
\hline \text { Special release entitlements report. } & & & \
\hline \begin{array} { l } 
\text { Report on compliance with applicable laws and } \
\text { regulations and internal control. }
\end{array} & & & \
\hline \text { Report on the schedule of expenditures of federal funds. } & & & \
\hline \text { Report on major foreign transactions. } & & & \
\hline
\end{array}$$

Accepted Answer

@#IMG-DLM& * No such

Operational audits are primarily concerned with whether an organization follows appropriate laws and regulations.

The passage of the Foreign Corrupt Practices Act increased the demand for internal auditing.

The first internal auditors were primarily concerned with operational auditing.

Among the Dodd-Frank Wall Street Reform and Consumer Protection Act's requirements is one requiring:

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.

When performing an audit of a city in accordance with the Single Audit Act, an auditor should adhere to:

Internal auditing is considered to be part of an organization's:

Kent is auditing an entity's compliance with requirements governing a major federal financial assistance program in accordance with the Single Audit Act. Kent detected noncompliance with requirements that have a material effect on that program. Kent's report on compliance should express a(an):

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

Costs paid with federal assistance that appear to be in violation of a law or regulation are known as:

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

When auditing an entity's financial statements in accordance with Government Auditing Standards (the "Yellow Book"), an auditor is required to report on: I. Noteworthy accomplishments of the program. II. The scope of the auditor's testing of internal controls.

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

The work of internal auditors is primarily for the benefit of management and the board of directors.

The scope of an internal audit is initially defined by the:

Interviewing operating personnel, identifying the objectives of the auditee, identifying standards used to evaluate performance, and assessing the risk inherent in the auditee's operations are activities typically performed in which phase of an internal audit?

An operational audit report which deals with the scrap disposal function in a manufacturing company is most likely to address:

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of Cpas

Audit Evidence and Documentation

Planning the Audit; Linking Audit Procedures to Risk

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

Filters

Exam 21: Internal, Operational, and Compliance Auditing

Operational audits are primarily concerned with whether an organization follows appropriate laws and regulations.

The passage of the Foreign Corrupt Practices Act increased the demand for internal auditing.

The first internal auditors were primarily concerned with operational auditing.

Among the Dodd-Frank Wall Street Reform and Consumer Protection Act's requirements is one requiring:

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.

When performing an audit of a city in accordance with the Single Audit Act, an auditor should adhere to:

Internal auditing is considered to be part of an organization's:

Kent is auditing an entity's compliance with requirements governing a major federal financial assistance program in accordance with the Single Audit Act. Kent detected noncompliance with requirements that have a material effect on that program. Kent's report on compliance should express a(an):

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

Costs paid with federal assistance that appear to be in violation of a law or regulation are known as:

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

When auditing an entity's financial statements in accordance with Government Auditing Standards (the "Yellow Book"), an auditor is required to report on: I. Noteworthy accomplishments of the program. II. The scope of the auditor's testing of internal controls.

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

The work of internal auditors is primarily for the benefit of management and the board of directors.

The scope of an internal audit is initially defined by the:

Interviewing operating personnel, identifying the objectives of the auditee, identifying standards used to evaluate performance, and assessing the risk inherent in the auditee's operations are activities typically performed in which phase of an internal audit?

An operational audit report which deals with the scrap disposal function in a manufacturing company is most likely to address:

The Role of the Public Accountant in the American Economy

Professional Standards

Professional Ethics

Legal Liability of Cpas

Audit Evidence and Documentation

Planning the Audit; Linking Audit Procedures to Risk

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

Filters