AUDITING THEORY ANSWER KEY

CHAPTER 2.1

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

- It concentrates on seeking aspects of operations in which waste could be

reduced by the introduction of controls.

12. Compliance auditing often extends beyond audits leading to the expression of
opinion on the fairness of financial presentation and includes audits of efficiency,
economy effectiveness, as well as

- Adherence to specific rules of procedures

13. A summary of findings rather than assurance is most likely to be included in a(n):

- Review report

14. The attest function:

- Requires a consideration of internal control

15. Attestation risk is limited to a low level in which of the following engagement(s)?

- Both examinations and reviews

16. An operational audit differs in many ways from an audit of financial statement.
Which of the following is the best example of one of these differences?

- Operational audits are more subjective and often involve evaluating

efficiency and effectiveness of operations.

17. Which of the following terms best describes the audit of a taxpayer's tax return by
an BIR auditor?

- Internal Audit

18. Inquiries and analytical procedures ordinarily form the basis for which type of
engagement?

- Review

19. Operational auditing is primarily oriented toward:

 - Future improvements to accomplish the goals of management

20. A typical objective of an operational audit is for the auditor to:

- Make recommendations for improving performance