MCQ ON Performance Auditing Guidelines 2014 MCQ | SAS EXAM PREPARATION

MCQ ON Performance Auditing Guidelines

We have provide Mcq on performance audit guidelines 2004 ,MCQs have been taken from available sources and telegram group. These Mcqs are provided so that it can be accessed easily for revision. Performance audit guidelines is important portion of PC 22 SAS Syllabus.

Which one is not correct regarding Performance Audit?
A. These guidelines are prescriptive in nature.
B. These are intended to supersede the professional judgement of the Accountant General, relevant to the individual sectors of entity operations and within each sector, to the individual subjects.
C. The Accountant General is expected to make situation or subject specific adjustments to the provisions set out in these guidelines.
D. However, Accountants General will be expected to document the rationale of all significant departures from the guidelines and obtain authorisation from the competent authority.
Answer
Answer: B
Performance audit is an independent assessment or examination of the extent to which an organisation, programme or scheme operates economically, efficiently and effectively.
Which Regulation of Regulations on Audit and Accounts, 2007 is quoted above?
A. 48
B. 58
C. 68
D. 78 [SAS Mains 2018]
Answer
Answer: C
Which is not among the 3 Es in Performance Audit?
A. economy
B. enthusiasm
C. efficiency
D. effectiveness
Answer
Answer: B
Minimising the cost of resources used by acquiring them in due time, appropriate quantity and quality and at the best price is _
A. economy
B. efficiency
C. effectiveness
D. None of the above
Answer
Answer: A
What determines the relationship between resources employed and outputs delivered; in terms of quantity, quality and timing?
A. economy
B. efficiency
C. effectiveness
D. None of the above
Answer
Answer: B
_ is meeting the objectives set and achieving the intended results.
A. economy
B. efficiency
C. effectiveness
D. None of the above
Answer
Answer: C
Find the incorrect.
A. Effectiveness is essentially a goal-attainment concept.
B. When focusing on effectiveness, it is important to distinguish between the immediate outputs or products and the ultimate impacts or outcomes.
C. Outcomes will often be influenced by external factors and may require short-term rather than long term assessment.
D. Performance Audit assess and establish with evidence whether the observed direct or indirect social and economic impacts of a policy are due to the policy or to other causes.
E. Performance Audit assess whether the programme complements, duplicates, overlaps or counteracts other related programmes.
Answer
Answer: C
By imposing the question- ‘Are things being done in the right way?’, performance auditing is mainly concerned with aspects of-
A. economy
B. efficiency
C. effectiveness
D. A or B
Answer
Answer: D
By imposing the question- ‘Are the right things being done?’, performance auditing is mainly concerned with aspects of-
A. economy
B. efficiency
C. effectiveness
D. A or B
Answer
Answer: C
Which one is not correct?
A. The performance auditor needs to examine whether the means chosen represent the most or at least a reasonable economical use of public funds.
B. It questions the intentions and decisions of the legislature, but examines whether any shortcomings in the laws and regulations or their way of implementation have prevented the specified objectives from being achieved.
C. The performance auditor is not normally expected to provide an overall opinion on the achievement of economy, efficiency and effectiveness on the level of the audited entity in the same way as the opinion on financial statements.
D. Performance auditing is a means to an end and not an end by itself.
E. Performance audit should be aimed at adding value to the Management by way of reliable, objective and independent information, highlighting the shortcomings in programme planning, implementation, information systems affecting the outputs and outcome specifically and quality of expenditure or management generally.
Answer
Answer: B
Audit objectives could be-
A. descriptive (How are the things?)
B. normative (are things as they ought to be?)
C. analytical (why are things not as they ought to be?)
D. All of the above
Answer
Answer: D
Performance auditing generally follows one of three approaches-
A. system-oriented approach
B. result-oriented approach
C. problem-oriented approach
D. All of the above
Answer
Answer: D
What examines the proper functioning of management systems, e.g. financial management systems?
A. system-oriented approach
B. result-oriented approach
C. problem-oriented approach
D. All of the above
Answer
Answer: A
Which assesses whether outcome or output objectives have been achieved as intended or programmes and services are operating as intended?
A. system-oriented approach
B. result-oriented approach
C. problem-oriented approach
D. All of the above
Answer
Answer: B
Which examines, verifies and analyses the causes of particular problems or deviations from criteria?
A. system-oriented approach
B. result-oriented approach
C. problem-oriented approach
D. All of the above
Answer
Answer: C
In a __ performance audit, the starting point is a known or suspected deviation from what should or could be.
A. system-oriented approach
B. result-oriented approach
C. problem-oriented approach
D. All of the above
Answer
Answer: C
Find the incorrect one.
A. Audits can be pursued from a top-down or bottom-up perspective.
B. Top-down audits concentrate mainly on the requirements, intentions, objectives and expectations of the legislature and central government.
C. A bottom-up perspective focuses on problems of significance to people and the community.
D. None of the above
Answer
Answer: D
What are the reasons why a regular communication is of particular importance in performance audit?
A. As performance audits are not normally conducted on a regular (e.g. annual) basis on the same audited entities, channels of communication may not already exist. While there may be contacts with the legislature and government bodies, other groups (such as academic and business communities or civil society organisations) may not have been engaged with previously.
B. Often there are no predefined criteria (such as a financial reporting framework), and therefore an intensive exchange of views with the audited entity is necessary.
C. An active effort is required to obtain insight into the points of view of the various stakeholders to bring out a balanced report.
D. All of the above
Answer
Answer: D
Which is not correct about Strategic Audit planning?
A. Strategic Audit planning is the process of determining the goals for the Department and the best approach for attaining them.
B. The goals should be long term.
C. The goals may be long as well as short term.
D. The field audit offices are also required to prepare their audit plans with reference to the Department’s strategic audit plan.
Answer
Answer: C
The Department’s Senior Management may conduct brainstorming meetings with Accountants General from time to time in respect of strategic audit and annual audit plans to select the subjects which address the Department’s concerns for high risk programmes and activities. Senior Management comprises-
A. C&AG of India, Deputy C&AG and Additional Deputy C&AG.
B. C&AG of India and Deputy C&AG.
C. Deputy C&AG and Additional Deputy C&AG.
D. C&AG
Answer
Answer: A
_ of a subject is an assessment of the interest it generates in the general public and the legislature.
A. Materiality
B. Significance
C. Visibility
D. Scope
Answer
Answer: C
Before implementing the performance audit, it is important to identify the audit objectives, the scope and the methodology to achieve the objectives of a particular performance audit. This is often done in the form of-
A. Pilot study
B. Preparation of Audit Design Matrix
C. Determining audit criteria
D. Planning individual performance audits
Answer
Answer: A
Find the incorrect one regarding Pilot Study?
A. The purpose of this study is to establish whether the conditions for carrying out a performance audit exist and, if they do exist, to produce an audit proposal.
B. It provides background knowledge and information needed to understand the entity, program, or function.
C. At the end of the study, it may be clearly stated whether performance audit is feasible or not.
D. Pilot study should normally be carried out in a fairly long period.
Answer
Answer: D
The most important stage in the performance audit process is-
A. Defining the audit objectives
B. Determining audit criteria
C. Deciding audit approach
D. Developing audit questions
Answer
Answer: A
Which criteria are free from any bias of the auditor or management?
A. Reliability
B. Objectivity
C. Comparability
D. Completeness
Answer
Answer: B
Find the correct one about Audit Design Matrix (ADM).
A. The Audit Design Matrix is prepared on the basis of information and knowledge obtained in the planning phase during the course of pilot study.
B. Audit teams are encouraged to update the Audit Design Matrix as and when it acquires more in-depth knowledge of the audit subject matter.
C. A well-designed Audit Design Matrix leads to efficient planning and resultant effective audits thereby providing highest assurances to the audited entities and those charged with governance.
D. It is desirable to prepare ADM for each of the audit objectives.
E. All of the above.
Answer
Answer: E
Find the correct one about Audit Findings Matrix (AFM).
A. The audit teams are encouraged to prepare an Audit Findings Matrix indicating the audit findings vis-à-vis good practices and the potential audit recommendation along with the expected benefits in case the recommendation is implemented.
B. It is meant to provide a link between the audit objectives, criteria, the audit observation and the recommendations emerging there from.
C. The audit teams should link the Audit Findings Matrix with Audit Design Matrix and highlight the Para number as well as chapter number of the draft report against each of the audit objective where the observations are reported.
D. All of the above.
Answer
Answer: D
Audit findings are the specific evidence gathered by the auditor to satisfy the audit objectives. Audit findings contain four elements.
A. criteria (‘what should be’)
B. condition (‘what is’)
C. effect (‘what are the consequences’ – observed as well as ‘reasonable and logical future impact’)
D. cause (‘why is there a deviation from norms or criteria’)
E. All of the above.
Answer
Answer: E
Evidence should be obtained to support the auditor’s judgment and conclusions regarding the organisation, programme, activity or function under audit. Which one is not a basic evidence?
A. Competence
B. Reliable
C. Relevant
D. Reasonable
Answer
Answer: B
Evidence is _ when it is valid and reliable and actually represents what it purports to represent.
A. Competent
B. Reliable
C. Relevant
D. Reasonable
Answer
Answer: A
_ is measure of quality of audit evidence.
A. Competence
B. Reliability
C. Relevance
D. Reasonableness
Answer
Answer: C
The minutes of exit conference should be recorded and endorsed to the entity with a request to acknowledge the minutes within stating that in case of non receipt of acknowledgement with in stipulated period, it will be presumed that audited entity concurs with the minutes.
A. two weeks
B. three weeks
C. four weeks
D. six weeks
Answer
Answer: A
Find the incorrect statement.
A. While third parties may not generally be the audited entities, their activities affect the program and service delivery, and audit reports often include commentary about their responsibilities and performance.
B. Auditors should not communicate to third parties, neither in writing nor orally any information they obtain in the course of audit work, except where doing so is necessary to discharge the statutory or otherwise prescribed responsibilities.
C. In case any information is required from third parties, audited entity would requisition the same from the third party and provide to Audit. Further, where role of identified third parties is considered very significant to the audit conclusions and recommendations, the audited entities may be encouraged to bring out the concerns of those parties in their replies to audit.
D. None of the above.
Answer
Answer: D
The audit report is __ if the results of audit are presented persuasively and the conclusions and recommendations follow logically from the facts presented.
A. Objective
B. Convincing
C. Consistent
D. Constructive
Answer
Answer: B
_______of audit report is ensured through fair conclusions and balanced content and tone.
A. Objectivity
B. Convincing ability
C. Consistency
D. Constructiveness
Answer
Answer: A
__ of the report is secured by ensuring that it does not contain contradictory findings or conclusions in similar contexts or the conclusions on the same segment in different sections or parts of the report are not incompatible.
A. Objectivity
B. Convincing ability
C. Consistency
D. Constructiveness
Answer
Answer: C
The report is __ if it manifests a remedial approach rather than a critical approach and includes appropriate recommendations.
A. Objective
B. Convincing
C. Consistent
D. Constructive
Answer
Answer: D
A report is __ if it does not focus on criticism alone but contains fair assessment or evaluation, which would mean that good performance should also be reported.
A. Objective
B. Balanced
C. Consistent
D. Convincing
Answer
Answer: B
All the performance Audits should ideally be completed within a period of __. The audit implementation cycle i.e from the date of entry conference to the finalisation of the audit report by the headquarters should be completed preferably within this period.
A. 6 months
B. 9 months
C. 10 months
D. 12 months
Answer
Answer: C
The follow up or evaluation of Performance audits can be performed by-
A. carrying out a desk review, which involves more detailed review of the implementation of the recommendations, including meeting, discussions and presentations, but does not necessarily comprise extensive field work
B. detailed follow-up review consisting of comprehensive field work in relation to the action taken by the entity on Audit’s recommendations with the objective of preparing a report to the legislature.
C. A & B
D. None of A & B
Answer
Answer: C
What is desk review?
A. detailed follow-up review consisting of comprehensive field work in relation to the action taken by the entity on Audit’s recommendations with the objective of preparing a report to the legislature.
B. more detailed review of the implementation of the recommendations, including meeting, discussions and presentations, but does not necessarily comprise extensive field work.
C. Only a sample of completed audit engagements should be selected for review by the group. Once the audits are selected, the quality review team may review the audit documentation and meet some of the staff members who worked on those engagements.
D. performed by an independent team which may be internal or external to the Department to evaluate whether an organization’s internal quality control system is suitably designed and operating effectively to provide the entity with reasonable assurance that established policies, procedures and applicable government auditing standards were being followed.

Answer

Answer: B

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MCQ ON Performance Auditing Guidelines

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