To
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Auditing and Assurance Services, 14e (Arens)
Chapter 26 Internal and Governmental Financial Auditing
and Operational Auditing
Learning Objective 26-1
1)Internal Auditors are expected to add value to the organization through improved
operational effectiveness. In addition, their responsibilities include all the following
except:
A) reviewing the reliability and integrity of information.
B) ensuring compliance with the company's accounting
policies. C) verifying accounting information for
external users.
D) ensuring compliance with applicable governmental
regulations. Answer: C
Terms: Internal auditors responsibilities
Diff: Easy
Objective: LO 26-1
AACSB: Reflective thinking skills
2)Statements on Internal Auditing Standards are issued by the:
A) AICPA.
B)SEC.
C) Internal Auditing Standards Boards.
D) Auditing Standards
Boards. Answer: C
Terms: Statements on Internal Auditing Standards
Diff: Easy
Objective: LO 26-1
AACSB: Reflective thinking skills
3)Internal auditors are
responsible to: A) the board of
directors.
B) management.
C) both A and B.
D) neither A nor
B. Answer: C
Terms: Internal auditors are responsible to
Diff: Easy
Objective: LO 26-1
AACSB: Reflective thinking skills
, To
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4)Which of the following is not a similarity between external and
internal auditors? A) Both must be independent of the company.
B) Both must be competent.
C) Both follow a similar methodology in performing their audits.
D) Both consider risk and materiality deciding the extent of their tests and
evaluating results. Answer: A
Terms: Similarity between internal and external auditors
Diff: Easy
Objective: LO 26-1
AACSB: Reflective thinking skills
5)External auditors would consider internal auditors effective if they are:
A) independent of the operating units being evaluated.
B)competent and well trained.
C) have performed relevant audit tests of the internal controls and financial statements.
D) all of the above.
Answer: D
Terms: External auditors; Internal auditors effective
Diff: Easy
Objective: LO 26-1
AACSB: Reflective thinking skills
6)Which of the following is most correct regarding external auditors use of internal
auditors directly on the audit engagement?
A)
discourage
B) prohibit
C)
encourage
D) permit
Answer: D
Terms: External auditors use of internal auditors
Diff: Easy
Objective: LO 26-1
AACSB: Reflective thinking skills
7)The international standards for the professional practice of internal auditing
include which two categories of standards?
A) attribute and performance
B) competency and professional
skepticism C) performance and
integrity
D) ethics and rules of
conduct Answer: A
Terms: International standards; Internal auditing
Diff: Easy
Objective: LO 26-1
AACSB: Reflective thinking skills
, To
To downloaddownload moremore ebooks,ebooks, slides,slides, SMSM andand TBTB visit:visit: http://testbanklancerhtp:/testbanklancer..blogspotblogspot..comcom
8)The professional organization which is responsible for providing guidance for internal
auditors is the: A) APA.
B) IIA. C)
ABA. D)
AIA.
Answer:
B
Terms: Professional organization responsible for guidance for internal auditors
Diff: Easy
Objective: LO 26-1
AACSB: Reflective thinking skills
9)An audit conducted in accordance with the Yellow Book must include an audit report
that states the audit was performed in accordance with:
A) GAAS.
B)
GAGAS.
C) GASA.
D) SAS.
Answer:
B
Terms: Yellow Book; Audit report; Audit performed in accordance with
Diff: Moderate
Objective: LO 26-1
AACSB: Reflective thinking skills
10) External financial statement auditors must obtain evidence regarding what
attributes of an internal audit department if the external auditors intend to rely on the
internal auditor's work?
A)
Independence from the Audit
Committee Competence
Yes Yes
B)
Independence from the Audit
Committee Competence
No No
C)
Independence from the Audit
Committee Competence
Yes No
D)
Independence from the Audit
Committee Competence
No Yes
Answer: D
Terms: External auditors rely on internal auditor's
work
Diff: Challenging
Objective: LO 26-1
AACSB: Reflective thinking skills
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