Chapter 1 LO6

Question 1

what is a compliance audit?

Answer 1

Determines whether the auditee is following specific procedures, rules, or regulations set by some higher authority.

Question 2

what does management expect at completeion of operational audit?

Answer 2

recommendations for improving operations

Question 3

what kind of audit Evaluates the efficiency and effectiveness of any part of an organization’s operating procedures and methods.

Answer 3

operational audit

Question 4

criteria for financial statment audit normally GAAP or IFRS but some auditors conduct audits of financial statements prepared using what?

Answer 4

cash basis or some other basis of accounging appropriate for the organization

Question 5

what is an operational audit?

Answer 5

Evaluates the efficiency and effectiveness of any part of an organization’s operating procedures and methods.

Question 6

T/F because of the many different areas in which operatinal effectiveness can be evaluatied, impossible to characterize the ocnduct of a typical operational audit

Answer 6

T

Question 7

T/F it is not more difficult to objectively evaluate whether the efficiency and effectivness of operations meets established criteria than for compliance and fiancial statement audit

Answer 7

F

Question 8

what are the 3 primary types of audits?

Answer 8

1. operational 2. compliance 3. financial statement

Question 9

results of compliance audits are usually reported to who

Answer 9

management

Question 10

what kind of audit Determines whether the auditee is following specific procedures, rules, or regulations set by some higher authority.?

Answer 10

compliance audit

Question 11

a significant portion of compliance work is done by who?

Answer 11

the auditors employed by the organization issuing the requirements

Question 12

what is a financial statement audit

Answer 12

Determines whether the financial statements are stated in accordance with specific criteria. The criteria are normally U. S. GAAP or international accounting standards.

Question 13

what other things to auditors focus on besides accounting transactions due to business complexity

Answer 13

1. operating controls 2. undertanding of entitiy and environment 3. knowledge client industry and regulatory and operating environment 4. know about external relationships 5. consider client bus strategies and processes and critical success factors related to strategies this all helps identify bus risks associated with client strategies that may affect whether financial satatement fairly stated

Question 14

what kind of audit Determines whether the financial statements are stated in accordance with specific criteria. The criteria are normally U. S. GAAP or international accounting standards.?

Answer 14

financial statement audit

Question 15

T/F in operational auditing, reviews are not limitd to accouting

Answer 15

T

Question 16

because establishing criteria for evaluating info in operational audit is extremly subjective an operational audit is more like what ? than auditing

Answer 16

management consulting