Free Internal Affairs Service Conducting Audits Questions and Answers

Question 1

Which of the following professionals has primary responsibility for the performance of an audit?

Accepted Answer

The partner in charge of the engagement.

Answer

The managing partner of the firm.

Answer

The senior assigned to the engagement.

Answer

The manager assigned to the engagement.

Question 2

What is the proper organizational role of internal auditing?

Accepted Answer

To serve as an independent, objective assurance and consulting activity that adds value to operation

Answer

To assist the external auditor in order to reduce external audit fees

Answer

To perform studies to assist in the attainment of more efficient operations.

Answer

To serve as the investigative arm of the audit committee of the board of directors.

Question 3

Operational audits generally have been conducted by internal and COA auditors, but may be performed by certified public accountants. A primary purpose of an operational audit is to provide.

Accepted Answer

A measure of management performance in meeting organizational goals.

Answer

The result of internal examinations of financial and accounting matters to a company's top-level management.

Answer

Aid to the independent auditor, who is conducting the examination of the financial statements.

Answer

A means of a assurance that internal accounting controls are functioning as planned.

Question 4

Governmental  auditing  often  extends  beyond  examinations  leading  to  the  expression  of opinion  on  the  fairness  of  financial  presentation  and  includes  audits  of  efficiency, economy, effectiveness and also?

Accepted Answer

Compliance

Answer

Accuracy

Answer

Evaluation

Answer

Internal control

Question 5

An objective of a performance audit is to determine whether an entity’s

Accepted Answer

Specific operating units are functioning economically and efficiently

Answer

Operational information is in accordance with government auditing standards.

Answer

Financial statements present fairly the results operations.

Answer

Internal control is adequately operating as designed.

Question 6

Internal auditors should review the means of physically safeguarding assets from losses arising from?

Accepted Answer

Exposure to the elements

Answer

Under usage of physical facilities

Answer

Misapplication of accounting principles.

Answer

Procedures that are not cost justified

Question 7

The internal auditing department’s responsibility for deterring fraud is to?

Accepted Answer

Examine and evaluate the system of internal control

Answer

Establish an effective internal control system

Answer

Maintain internal control

Answer

Exercise operating authority over fraud prevention activities

Question 8

Internal auditors review the adequacy of the company’s internal control system primarily to?

Accepted Answer

Determine whether the internal control system provides reasonable assurance that the company's objectives and goals are met efficiently and economically

Answer

Help determine the nature, timing and extent of tests necessary to achieve audit objectives

Answer

Ensure that material weaknesses in the system of internal control are corrected

Answer

Determine whether the internal control system ensures that financial statements are fairly presented

Question 9

Which  of  the  following  services,  if  any,  may  a  practitioner  who  is  not  independent provide?

Accepted Answer

Compilations but not reviews

Answer

Reviews but not compilations

Answer

Reviews but not financially statement audits.

Answer

Agreed upon procedures but not compilations

Question 10

In the case of audit engagements, it is in the public interest and, therefore, required by the Code that members of audit teams, firms and network firms shall be independent of audit clients. Independent requires?

Accepted Answer

Both independence of mind and independence in appearance

Answer

Independence of mind only

Answer

Independence in appearance only

Answer

Either independence of mind or independence in appearance