Multiple Choice Questions
The following questions deal with types of audits and auditors. Choose the best response.
a. Operational audits generally have been conducted by internal auditors and governmental audit agencies but may be performed by certified public accountants. A primary purpose of an operational audit is to provide
(1) A means of assurance that internal accounting controls are functioning as planned.
(2) A measure of management performance in meeting organizational goals.
(3) The results of internal examinations of financial and accounting matters to a company's top-level management.
(4) Aid to the independent auditor, who is conducting the audit of the financial statements.
b. In comparison to the external auditor, an internal auditor is more likely to be concerned with
(1) Internal administrative control.
(2) Cost accounting procedures.
(3) Operational auditing.
(4) Internal control.
c. Which of the following best describes the operational audit?
(1) It requires the constant review by internal auditors of the administrative controls as they relate to the operations of the company.
(2) It concentrates on implementing financial and accounting control in a newly organized company.
(3) It attempts and is designed to verify the fair presentation of a company's results of operations.
(4) It concentrates on seeking aspects of operations in which waste could be reduced by the introduction of controls.
d. Compliance auditing often extends beyond audits leading to the expression of opinions on the fairness of financial presentation and includes audits of efficiency, economy, effectiveness, as well as
(1) Accuracy.
(2) Evaluation.
(3) Adherence to specific rules or procedures.
(4) Internal control.