Question 1

Internal auditors perform audits and consulting engagements.

Accepted Answer

Internal auditors are responsible for performing both audits and consulting engagements as part of their role within an organization. Audits typically involve analyzing and evaluating an organization's internal controls, financial reporting systems, and compliance with laws and regulations, while consulting engagements might include providing advice and guidance on risk management strategies, process improvements, or other operational issues.

Question 2

The goal of sustainability auditing is to help managers discharge their management responsibilities and improve profitability.

Accepted Answer

The goal of sustainability auditing is to assess and improve an organization's environmental and social performance, not specifically to improve profitability.

Question 3

The Single Audit Act of 1984 requires the auditors of the financial statements to include a paragraph in the audit report on the appropriate spending of money received through government grants.

Accepted Answer

False

Question 4

Governmental and internal auditors are more concerned with compliance with laws,regulation and policy than are external auditors.

Accepted Answer

Governmental and internal auditors work within the organization and are responsible for ensuring that the organization is complying with laws, regulations, and policies. External auditors are hired by the organization to provide an independent opinion on the accuracy of financial statements and are less concerned with compliance issues.

Question 5

Forensic accounting is a term used solely to describe work that is performed when evidence of fraud exists in an organization.
Question also found in study guide

Accepted Answer

Forensic accounting is a broader term that encompasses work that is done to support legal disputes, including fraud investigations, but it is not solely limited to instances of fraud.

Question 6

Internal auditing is an independent,objective assurance and consulting activity designed to provide and opinion on the fair presentation of financial information.

Accepted Answer

Internal auditing is designed to improve an organization's operations and add value by evaluating and improving the effectiveness of risk management, control, and governance processes, not just to provide an opinion on financial information.

Question 7

To ensure an internal auditor's independence it is preferable for the internal auditor to report directly to the audit committee.

Accepted Answer

Reporting directly to the audit committee helps to ensure that the internal auditor is not influenced or controlled by management and can provide unbiased and objective assessments of the organization's controls and processes.

Question 8

A stated objective of internal auditing is to add value to the organization.

Accepted Answer

This statement is true. According to the International Standards for the Professional Practice of Internal Auditing, one of the primary objectives of internal auditing is to add value to the organization by providing independent and objective assurance and consulting services.

Question 9

Under the Single Audit Act of 1984,CPAs and the GAO auditors coordinate their audits such that the government entity receives a "single audit."

Accepted Answer

The answer of Under the Single Audit Act of 1984,CPAs...

Question 10

The GAO emphasizes the risk management in government for the efficient,economical,and effective use of public funds and resources.

Accepted Answer

The answer of The GAO emphasizes the risk management in...

Question 11

Auditors are concerned about internal control strengths and weaknesses; fraud investigators are mostly concerned about fraud weaknesses.
Question also found in study guide

Accepted Answer

This statement is true. While auditors also consider the risk of fraud in their assessments of internal controls, their main focus is on identifying strengths and weaknesses in controls to ensure the accuracy and reliability of financial statements. Fraud investigators, on the other hand, are primarily concerned with identifying and detecting fraud, including vulnerabilities in processes that may have allowed fraud to occur.

Question 12

Internal auditors are responsible for providing a report on internal controls that is included in the 10K.

Accepted Answer

External auditors, not internal auditors, are responsible for providing a report on internal controls included in the 10-K filing.

Question 13

The GAO standards go beyond the AICPA's GAAS in a number of respects.
Question also found in study guide

Accepted Answer

The answer of The GAO standards go beyond the AICPA's...

Question 14

The auditing standards of the Institute of Internal Auditors required internal auditors to follow the ethics standards established by the AICPA.

Accepted Answer

The Institute of Internal Auditors has established their own Code of Ethics that internal auditors are required to follow. While the AICPA also has their own Code of Ethics, it is not mandatory for internal auditors to follow it.

Question 15

An expert in detecting and investigating fraud is a certified fraud investigator.

Accepted Answer

A certified fraud investigator is a professional who has demonstrated expertise in detecting, investigating, and preventing fraud. They have gone through a rigorous certification process and are considered experts in their field.

Question 16

Internal auditors should be independent when obtaining evidence in the sense of being free financial relationships such as owning stock.

Accepted Answer

The answer of Internal auditors should be independent when obtaining...

Question 17

The Government Accountability Office (GAO)is provides auditing standards that are followed by internal auditors and governmental auditors.

Accepted Answer

The answer of The Government Accountability Office (GAO)is provides auditing...

Question 18

Auditors are responsible for establishing key measures in order to evaluate the efficiency,economy,and program outputs.

Accepted Answer

Auditors are responsible for assessing and evaluating the efficiency, economy, and effectiveness of programs, but they do not establish the key measures; these are typically set by the organization or management.

Question 19

External auditors accepting engagements to audit federal grants and programs must follow both GAAS and the GAO standards.
Question also found in study guide

Accepted Answer

External auditors who perform audits of federal grants and programs are required to comply with Generally Accepted Auditing Standards (GAAS) and standards set by the Government Accountability Office (GAO).

Question 20

Performance audits determine whether an entity's program has resulted in the desired outcomes.

Accepted Answer

Performance audits are indeed conducted to assess whether a program, activity or operation has achieved its intended outcomes or objectives. They focus on evaluating the effectiveness and efficiency of the program, identifying any problems or areas for improvement, and recommending actions to enhance performance.

Quiz 16: Internal Audits, Governmental Audits, and Fraud Examinations