The following questions deal with operational auditing. Choose the best response. 

a. Which of the following best describes the operational audit?

(1) It concentrates on seeking aspects of operations in which waste would be reduced by the introduction of controls. 

(2) It requires constant review by internal auditors of the administrative controls as they relate to the operations of the company. 

(3) It concentrates on implementing financial and accounting controls in a newly organized company. 

(4) It attempts and is designed to verify the fair presentation of a company’s results of operations. 

b. The purpose of governmental effectiveness or program auditing is to determine whether the desired results of a program are being achieved. The first step in conducting such an audit is to 

(1) Evaluate the system used to measure results. 

(2) Determine the time frame to be audited. 

(3) Collect quantifiable data on the program’s success or failure. 

(4) Identify the legislative intent of the program being audited. 

c. A means of limiting production delays caused by equipment breakdown and repair is to 

(1) Schedule production based on capacity planning.

(2) Plan maintenance activity based on an analysis of equipment repair work orders. 

(3) Pre-authorize equipment maintenance and overtime pay. 

(4) Establish a preventive maintenance program for all production equipment.