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:

Property Liability

Legal responsibility for damages or injuries occurring on one's property, typically requiring owners to maintain safe conditions to avoid claims.

Common Law

Law developed by judges, courts, and similar tribunals, stated in opinions that nominally decide individual cases but have wider applicative potential.

Environmental Legislation

Laws and regulations aimed at preserving and protecting the environment from harm and pollution.

Foul Odour

An unpleasant or offensive smell, often associated with pollution, decay, or chemical substances.