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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.
(3) operational auditing.
Which of the following attributes is likely to be unique to the audit work of CPAs as compared to the work performed by practitioners of other professions? (1) Independence. (2) Competence. (3) Due professional care. (4) Complex body of knowledge.
(1) Independence.
Which of the following professional services is an attestation engagement? (1) A consulting service engagement to provide computer-processing advice to a client. (2) An engagement to report on compliance with statutory requirements. (3) An income tax engagement to prepare federal and state tax returns. (4) The preparation of financial statements form a client's financial records.
(2) An engagement to report on compliance with statutory requirements.
Independent auditing can best be described as: (1) a branch of accounting. (2) a discipline that attests to the results of accounting and other functional operations and data. (3) a professional activity that measures and communicates financial and business data. (4) a regulatory function that prevents the issuance of improper financial information.
(2) a discipline that attests to the results of accounting and other functional operations and data.
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.
(2) a measure of management performance in meeting organizational goals.
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) adherence to specific rules or procedures. (3) evaluation. (4) internal control
(2) adherence to specific rules or procedures.
Which of the following best describes why an independent auditor is asked to express an opinion on the fair presentation of financial statements? (1) It is difficult to prepare financial statements that fairly present a company's financial position, results of operations, and cash flows without the expertise of an independent auditor. (2) It is management's responsibility to seek available independent aid in the appraisal of the financial information shown in its financial statements. (3) The opinion of an independent party is needed because a company may not be objective with respect to its own financial statements. (4) It is a customary courtesy that all stockholders receive an independent report on management's stewardship in managing the affairs of the business.
(3) The opinion of an independent party is needed because a company may not be objective with respect to its own financial statements.
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.
(4) It concentrates on seeking aspects of operations in which waste could be reduced by the introduction of controls.
