Question: Multiple Choice Questions Select the best answer for each of

Multiple Choice Questions
Select the best answer for each of the following questions. Explain the reasons for your selection.
a. Internal auditing can best be described as:
(1) An accounting function.
(2) A compliance function.
(3) An activity primarily to detect fraud.
(4) A control function.

b. The independence of the internal auditing department will most likely be assured if it reports to the:
(1) Audit committee of the board of directors.
(2) President.
(3) Controller.
(4) Treasurer.

c. When performing an operational audit, the purpose of a preliminary survey is to:
(1) Determine the objective of the activity to be audited.
(2) Determine the scope of the audit.
(3) Identify areas that should be included in the audit program.
(4) All of the above.

d. Operational auditing is primarily oriented toward:
(1) Future improvements to accomplish the goals of management.
(2) Ensuring the accuracy of the data in management’s financial reports.
(3) Determination of the fairness of the entity’s financial statements.
(4) Compliance with laws and regulations.

e. Which of the following bodies promulgates standards for audits of federal financial assistance programs?
(1) Governmental Accounting Standards Board.
(2) Financial Accounting Standards Board.
(3) Government Accountability Office.
(4) Governmental Auditing Standards Board.

f. As compared to an audit in accordance with GAAS, an audit in accordance with Generally Accepted Government Auditing Standards requires the auditors to:
(1) Use a lower level of materiality.
(2) Perform additional tests of internal control.
(3) Issue an additional report on compliance with laws and regulations and internal control.
(4) Fulfill all of the above requirements.

g. In a compliance attestation engagement, CPAs may address an organization’s:

h. The portion of internal control most directly related to a CPA’s engagement to attest to compliance with laws and regulations is:
(1) Internal control over compliance.
(2) Internal control over financial reporting.
(3) Internal control over laws and regulations.
(4) Internal control over operations.

i. When issuing an unqualified audit report in a compliance attestation engagement, the CPA may report on:

j. When issuing a qualified audit report in a compliance attestation engagement, the CPA may report on:

k. An important aspect of performing an audit in accordance with the Single Audit Act is to identify:
(1) Major federal financial assistance programs.
(2) Government generally accepted assertions.
(3) Federal supplemental requirements.
(4) Title determination sub-acts.

l. The organization that administers the Certified Internal Auditor program is the:
(1) American Institute of Certified Public Accountants—Certified Internal Auditor Division.
(2) The Institute of Internal Auditors.
(3) American Accounting Association
(4) Securities and ExchangeCommission.
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