An Operational Audit Differs in Many Ways from an Audit

question 42

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) The boundaries of an operational audit are often drawn from an organization chart and are not limited to a single accounting period.
• 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:

American Opportunity Tax Credit

A refund for allowable educational fees paid for a qualifying scholar during their first four years of advanced education.

Qualifying Expenses

Specific expenses that meet criteria set by tax laws or other regulations for deduction or special treatment.

AGI

Adjusted Gross Income, calculated by taking gross income and subtracting specific deductions. It's used to determine taxable income and eligibility for certain tax credits and deductions.

University Of Nevada

A public research university located in the state of Nevada, known for its programs in numerous fields of study.