Professional Documents
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Internal and Governmental Financial Auditing and Operational Auditing
Internal and Governmental Financial Auditing and Operational Auditing
Internal and Governmental Financial Auditing and Operational Auditing
Chapter 25
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Learning Objective 1
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Internal Auditing
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Institute of Internal Auditors
Ethical Principles
Integrity Confidentiality
Objectivity Competency
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Relationship of Internal
and External Auditors
Competency Methodology
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Learning Objective 2
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Governmental Financial Auditing
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Governmental Financial Auditing
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Financial Audit and Reporting
Requirements Yellow Book
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Audit and Reporting Single Audit
Act and OMB Circular A-133
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Audit and Reporting Single Audit
Act and OMB Circular A-133
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Audit Requirements
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Audit Requirements
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Reporting Requirements
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Reporting Requirements
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Operational Auditing
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Learning Objective 3
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Differences between Operational
and Financial Auditing
Purpose of
the audit
Distribution of
the reports
Inclusion of
nonfinancial areas
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Learning Objective 4
Provide an overview of
operational audits.
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Effectiveness Versus Efficiency
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Effectiveness Versus Efficiency
Types of
Example
Inefficiency
Acquisition of goods and Bids for purchases of
services is excessively costly. materials are not required.
Raw materials are not An assembly line was shut
available when needed. down for lack of materials.
A duplication of effort by Production and accounting
employees exists. keep identical records.
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Relationship between Operational
Auditing and Internal Controls
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Types of Operational Audits
Functional
Organizational
Special assignments
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Who Performs
Operational Audits
Internal
auditors
Government
auditors
CPA firms
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Independence and Competence
of Operational Auditors
Independence Competence
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Learning Objective 5
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Criteria for Evaluating
Efficiency and Effectiveness
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Criteria for Evaluating
Efficiency and Effectiveness
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Criteria for Evaluating
Efficiency and Effectiveness
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Sources of Criteria
Historical performance
Benchmarking
Engineers standards
Discussion and agreement
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Phases in Operational Auditing
Planning
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Planning
Scope of engagement
Staffing
Background information
Understand internal control
Decide on appropriate evidence
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Evidence Accumulation
and Evaluation
Documentation
Client
Observation
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Reporting Follow-up
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Examples of Operational
Audit Findings
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End of Chapter 25
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