Select the best answer for each of the following questions. Explain the reasons for your selection.

a. Internal auditing can best be described as:

(1) An accounting function.

(2) A compliance function.

(3) An activity primarily to detect fraud.

(4) A control function.

b. The independence of the internal auditing department will most likely be assured if it reports to the:
(1) Audit committee of the board of directors.
(2) President.
(3) Controller.
(4) Treasurer.

c. When performing an operational audit, the purpose of a preliminary survey is to:
(1) Determine the objective of the activity to be audited.
(2) Determine the scope of the audit.
(3) Identify areas that should be included in the audit program.
(4) All of the above.

d. Operational auditing is primarily oriented toward:
(1) Future improvements to accomplish the goals of management.
(2) Ensuring the accuracy of the data in management's financial reports.
(3) Determination of the fairness of the entity's financial statements.
(4) Compliance with laws and regulations.

e. Which of the following bodies promulgates standards for audits of federal financial assistance programs?
(1) Governmental Accounting Standards Board.
(2) Financial Accounting Standards Board.
(3) General Accounting Office.
(4) Governmental Auditing Standards Board.

f. As compared to an audit in accordance with GAAS, an audit in accordance with Government Auditing Standards requires the auditors to:
(1) Perform additional compliance auditing procedures.
(2) Perform additional tests of internal control.
(3) Issue an additional report on compliance with laws and regulations and internal control.
(4) Fulfill all of the above requirements.