Question	Answer
1
2
3
4
5

Question	Answer
6
7
8
9
10

1.

A comprehensive examination of an operating unit or a complete organization to evaluate its systems, controls, and performance, as measured by management's objectives is called a(an):

A.	Compilation.

B.	Consultation.

C.	Operational Audit.

D.	"Yellow Book" audit.

2.

The operational auditors' preliminary conclusions about potential problem areas are summarized as:

A.	The definition of purpose.

B.	The audit program.

C.	The preliminary survey.

D.	The audit report.

3.

A primary purpose of operational auditing standards is to provide:

A.	A means of assurance that internal control is operating effectively.

B.	Aid to the independent auditor in conducting the audit of financial statements.

C.	The results of internal examinations of financial and accounting matters to the company's top-level management.

D.	A measure of management performance in meeting organizational goals.

4.

An operational audit report which deals with the scrap disposal function in a manufacturing company is most likely to address:

A.	The efficiency and effectiveness of the scrap disposal function and include any findings requiring corrective action.

B.	Whether the scrap material inventory is reported as a current asset.

C.	Whether the physical inventory count of the scrap material agrees with the recorded amount.

D.	Whether the scrap materials inventory is valued at the lower of cost or market.

5.

Interviewing operating personnel, identifying he objectives of the auditee, identifying standards used to evaluate performance, and assessing the risk inherent in the auditee's operations are activities typically performed in which phase of an internal audit?

A.	The fieldwork phase.

B.	The preliminary survey phase.

C.	The audit programming phase.

D.	The reporting phase.

True or False

6. Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations.

7. Internal Auditing helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes.

8. The internal auditors maintain independence by (1) Ensuring that the organizational status of the internal auditing department is sufficient to permit the accomplishment of its objectives, and (2) Policies and procedures regarding the assignment of internal auditors to assignments.

9 An operational audit is a comprehensive examination of an operating unit or a complete organization to evaluate its performance, as measured by management's objectives. It focuses on effectiveness, efficiency, and economy.

10. The major users of operational reports are top management, including the board of directors and, especially in the case of governmental organizations, Congress.