CGAP Audit Planning and Methodology 2

Question 1

What does 'audit scope' define in a government engagement?

Accepted Answer

The boundaries of what the audit will cover, including subject matter, time period, and organizational units

Answer

Audit scope establishes the boundaries — what will and will not be examined — including the period, programs, locations, and criteria to be applied.

Question 2

In a performance audit, what are 'criteria' used for?

Accepted Answer

The standards, benchmarks, or requirements against which the auditor evaluates the subject matter

Answer

Criteria provide the basis for evaluating whether conditions meet expectations; they may come from laws, regulations, best practices, or management's own standards.

Question 3

Which type of audit procedure involves examining original source documents, records, and assets?

Accepted Answer

Inspection

Answer

Inspection involves examining documents, records, or tangible assets and provides direct physical evidence about their existence or content.

Question 4

What is 'control testing' in a financial statement audit?

Accepted Answer

Testing the operating effectiveness of internal controls to support a reduced level of substantive testing

Answer

Control testing (tests of controls) assesses whether internal controls operated effectively during the period, allowing auditors to reduce the extent of substantive testing if controls are effective.

Question 5

In government auditing, what is 'due professional care'?

Accepted Answer

Applying the diligence, knowledge, and judgment expected of a reasonably prudent auditor in similar circumstances

Answer

Due professional care requires auditors to exercise the care and skill of a reasonably prudent professional, including appropriate planning, supervision, and documentation.

CGAP - Certified Government Auditing Professional Practice Test

CGAP - Certified Government Auditing Professional Practice Test

CGAP Audit Planning and Methodology 2