Question 1

The definition of internal audit includes all of the following except

Accepted Answer

A)  independence and objectivity.
B)  provision of assurance and consulting activity.
C)  determination of efficient and effective performance.
D)  additional value and improved operations.

Question 2

The purpose of the internal audit's evaluation of the effectiveness of existing risk management processes is to determine that

Accepted Answer

A)  management has planned and designed operations to provide reasonable assurance of achieving objectives and goals.
B)  management's policies and procedures will achieve objectives and goals.
C)  the organization's objectives and goals are established within risk limits established by the internal audit organization.
D)  the organization's objectives and goals will be achieved in an accurate and timely manner and with minimal use of resources.

Question 3

Program audits do not include determining

Accepted Answer

A)  the extent to which the desired results or benefits established by the legislature are being achieved.
B)  the effectiveness of organizations,programs,activities,or functions.
C)  whether the agency has complied with laws and regulations applicable to the program.
D)  whether the financial statements of an audited entity fairly present the financial position in accordance with GAAP.

Question 4

Although internal auditors are associated with their employers in the eyes of the public,they seek ____________________ and ____________________ independence.
Question also found in study guide

Accepted Answer

operationa...

Question 5

External auditors accepting engagements to audit federal grants and programs must follow both GAAS and the GAO standards.
Question also found in study guide

Accepted Answer

A) True 
 B)False

Question 6

Performance audits determine whether an entity's program has resulted in the desired outcomes.

Accepted Answer

A) True 
 B)False

Question 7

In a fraud investigation,the first objective is

Accepted Answer

A)  identify possible motives to commit a fraud.
B)  inspect documentation for tampering.
C)  establish who the perpetrators are.
D)  to determine if a fraud has been committed.

Question 8

A stated objective of internal auditing is to add value to the organization.

Accepted Answer

A) True 
 B)False

Question 9

Internal auditors perform audits and consulting engagements.

Accepted Answer

A) True 
 B)False

Question 10

Benford's Law is used to

Accepted Answer

Identify accounts with unusually large b...

Question 11

Operational audits do not include determining

Accepted Answer

A)  whether the entity is acquiring,practicing,and using resources economically and efficiently.
B)  review of control systems to ensure compliance with company policies.
C)  the causes of inefficiencies or uneconomical practices.
D)  whether the department's goals are aligned with the organization's goals.

Question 12

The purpose of the internal audit's evaluation of the effectiveness of existing risk management processes is to determine that

Accepted Answer

A)  management has planned and designed the process to provide reasonable assurance of achieving objectives and goals.
B)  management directs processes to provide reasonable assurance of achieving objectives and goals.
C)  the organization's objectives and goals will be achieved efficiently and economically.
D)  the organization's objectives and goals will be achieved in an accurate and timely manner and with minimal use of resources.

Question 13

The Single Audit Act of 1984 requires the auditors of the financial statements to include a paragraph in the audit report on the appropriate spending of money received through government grants.

Accepted Answer

A) True 
 B)False

Question 14

Auditors are concerned about internal control strengths and weaknesses; fraud investigators are mostly concerned about fraud weaknesses.
Question also found in study guide

Accepted Answer

A) True 
 B)False

Question 15

In a single audit of federal financial assistance programs,which of the following does the auditor not need to determine and report for each organization?

Accepted Answer

A)  An expanded scope audit of economy,efficiency,and program results.
B)  That the financial statements are presented fairly in accordance with GAAP.
C)  That an adequate internal control system is in place.
D)  That the laws and regulations have been complied with.

Question 16

Which of the following would be considered in determining whether an internal audit department is independent?

Accepted Answer

A)  The organizational level of the chief audit officer and the objectivity of the audit staff.
B)  A requirement for the auditors to report to the audit committee and the composition of the audit committee.
C)  The organizational status of the audit committee and the individual independence of internal auditors in the department.
D)  The nature of the audit charter and the objectivity of the audit staff.Question also found in textbook

Question 17

The demand for compliance auditing in generally accepted government auditing standards (GAGAS) terms is generated by

Accepted Answer

A)  acts discreditable to the profession.
B)  financial statement audits performed in accordance with generally accepted auditing standards.
C)  governmental managers' obligations to follow laws and regulations.
D)  public reports on government managers' following laws and regulations.

Question 18

The IIA Performance Standards do not include the standard for

Accepted Answer

A)  managing the internal audit activity.
B)  nature of work.
C)  compliance with policies,plans,procedures,laws and regulations.
D)  engagement planning.

Question 19

When considering the competence of internal auditors,external auditors should obtain evidence about the

Accepted Answer

A)  educational and experience qualifications of the internal auditors.
B)  organizational status of the internal auditors.
C)  lines of communication within the entity of the internal auditors.
D)  the size of the internal audit department.

Question 20

Having an audit charter is important for internal audit departments.Which of the following items is generally not a reason to have an audit charter?

Accepted Answer

A)  It provides a commitment from management to support the internal audit department's activities.
B)  It defines the skills and competencies required by the internal audit department.
C)  It defines the department's authority and responsibility.
D)  It defines the reporting requirements for internal audit departments.

Exam 16: Internal Audits, Governmental Audits, and Fraud Examinations

When considering the competence of internal auditors,external auditors should obtain evidence about the

Correct AnswerverifiedShow Answer

Auditors are concerned about internal control strengths and weaknesses; fraud investigators are mostly concerned about fraud weaknesses. Question also found in study guide

Correct AnswerverifiedShow Answer

External auditors accepting engagements to audit federal grants and programs must follow both GAAS and the GAO standards. Question also found in study guide

Correct AnswerverifiedShow Answer

Which of the following would be considered in determining whether an internal audit department is independent?

Correct AnswerverifiedShow Answer

Benford's Law is used to

Correct AnswerverifiedIdentify accounts with unusually large b...View AnswerShow Answer

The demand for compliance auditing in generally accepted government auditing standards (GAGAS) terms is generated by

Correct AnswerverifiedShow Answer

Operational audits do not include determining

Correct AnswerverifiedShow Answer

Having an audit charter is important for internal audit departments.Which of the following items is generally not a reason to have an audit charter?

Correct AnswerverifiedShow Answer

The definition of internal audit includes all of the following except

Correct AnswerverifiedShow Answer

Although internal auditors are associated with their employers in the eyes of the public,they seek ____________________ and ____________________ independence. Question also found in study guide

Correct Answerverifiedoperationa...View AnswerShow Answer

In a fraud investigation,the first objective is

Correct AnswerverifiedShow Answer

The purpose of the internal audit's evaluation of the effectiveness of existing risk management processes is to determine that

Correct AnswerverifiedShow Answer

In a single audit of federal financial assistance programs,which of the following does the auditor not need to determine and report for each organization?

Correct AnswerverifiedShow Answer

The purpose of the internal audit's evaluation of the effectiveness of existing risk management processes is to determine that

Correct AnswerverifiedShow Answer

Performance audits determine whether an entity's program has resulted in the desired outcomes.

Correct AnswerverifiedShow Answer

Program audits do not include determining

Correct AnswerverifiedShow Answer

Internal auditors perform audits and consulting engagements.

Correct AnswerverifiedShow Answer

The IIA Performance Standards do not include the standard for

Correct AnswerverifiedShow Answer

A stated objective of internal auditing is to add value to the organization.

Correct AnswerverifiedShow Answer

The Single Audit Act of 1984 requires the auditors of the financial statements to include a paragraph in the audit report on the appropriate spending of money received through government grants.

Correct AnswerverifiedShow Answer

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Identify accounts with unusually large b...
View Answer

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Although internal auditors are associated with their employers in the eyes of the public,they seek and independence. Question also found in study guide

Correct Answer
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operationa...
View Answer

Correct Answer
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