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1. Discuss the similarities and differences between financial statement audits, operational audits, and
compliance audits. Give an example of each type.
ANSWER:
Similarities between financial statement audits, operational audits, and compliance audits are that each
type of audit involves accumulating and evaluating evidence of relevant information to determine and
report the correspondence between the information and established standards. The difference between
each type of audit is the information to be checked and the criteria used to evaluate the information. An
example of an audit of financial statements is IBM’s annual audit. An example of an operational audit
would be an internal auditor’s evaluation of whether the company’s computerized payroll-processing
system is operating efficiently and effectively. An example of a compliance audit is the examination of
the IRS auditor
2. In the conducts of financial statements, it would be a serious breach of responsibility if the auditor did
not thoroughly understand accounting. However, many competent accountants do not have an
understanding of the auditing process. What causes this difference?
ANSWER:
The auditor need to know accounting knowledge it is because the auditors need to use accounting
knowledge to verify the accuracy of the accountant’s work. They examine the financial statements
prepared by accountants and ensure they represent the company's financial position accurately. They
are assembled in accordance with generally accepted accounting principles (GAAP). The accountant not
need to understanding of the auditing process it is because an accountant is no need to do the things as
an auditor .
