Question

In: Accounting

2. ) A. In a compliance audit, the auditor’s primary objective is to Determine that all...

2. ) A. In a compliance audit, the auditor’s primary objective is to

Determine that all instances of noncompliance are discovered and reported.

Provide management with recommendations for improvement over compliance.

Obtain sufficient appropriate evidence to form an opinion on compliance.

Test and express an opinion on internal control over compliance.

B.) When auditing an entity’s financial statements in accordance with Government Auditing Standards (the Yellow Book), an auditor is required to report on

Recommendations for actions to improve operations

The scope of the auditor’s tests of compliance with laws and regulations

I only.

Neither I nor II.

Both I and II.

II only.

Solutions

Expert Solution

Ans: )

C.) Both I and II

As per chapter 9, paragraph 10 of the Government Auditing Standards issued by the Comptroller General of the United States, specifying the “Requirements: Report Content, Including Objectives, Scope, and Methodology” for government audit reports, the following are the contents to be included in the audit report by the auditor:

  1. The objectives, scope, and methodology of the audit;
  2. The audit results, including findings, conclusions, and recommendations, as appropriate;
  3. A summary of the views of responsible officials; and
  4. If applicable, the nature of any confidential or sensitive information omitted.

Hence keeping in mind the above provided provisions the auditor is required to report both the recommendations for actions to improve operations and the scope of the auditor’s tests of compliance with laws and regulations.

Reference for the above has been taken from the Government Auditing Standards provided on www.gao.gov


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