An audit that involves obtaining and evaluating evidence in order to determine whether certain financial or operating activities of an entity conform to specified conditions, rules, or regulations is a(n):
A) internal audit.
B) external audit.
C) operational audit.
D) compliance audit.
E) financial statement audit.

Question

Quizplus · Accepted Answer

A compliance audit is specifically designed to evaluate whether an entity is following external laws, regulations, or internal guidelines. This type of audit focuses on verifying adherence to conditions, rules, or regulations that are set by external bodies or by the entity's own policies.

An Audit That Involves Obtaining and Evaluating Evidence in Order