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:

Cause And Effect

A relationship in which one event (the cause) makes another event happen (the effect).

Drive Outcomes

Strategies or actions implemented to directly influence and achieve specific goals or results in an organization.

Shop Floor Level

The area in a manufacturing facility where workers directly engage in production activities.

Standard Cost

The pre-determined and benchmarked cost of manufacturing a single unit of product, which is used for budgeting and performance evaluation.