An Operational Audit Differs in Many Ways from an Audit

question 12

Multiple Choice

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

• A)The usual audit of financial statements covers the four basic statements,whereas the operational audit is usually limited to either the balance sheet or the income statement.
• B)Operational audits are more subjective and often involve evaluating efficiency and effectiveness of operations.
• C)Operational audits do not ordinarily result in the preparation of a report.
• D)The operational audit deals with pre-tax income.

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Definitions:

Construct Validity

The extent to which a test or instrument accurately measures the theoretical construct it is intended to assess.

Reliability

The reliability and steadiness of outcomes produced by a measurement tool across multiple instances.

Aggregation

The process of combining multiple pieces or data points together to form a whole or summary measure.

Incremental Validation

A process of progressively verifying the steps or components of a model, system, or theory to ensure its accuracy or validity at each stage.