Certified Government Auditing Professional (CGAP) Practice Exam

What is the correct sequence for auditing internal accounting controls?

1. (a), (c), (d), (b)

2. (c), (d), (b), (a)

3. (a), (b), (d), (c)

4. (d), (a), (b), (c)

The correct answer is: (a), (b), (d), (c)

The correct sequence for auditing internal accounting controls follows a logical progression that allows auditors to assess the effectiveness of these controls systematically. In this context, the sequence typically starts with understanding the internal control environment, risk assessment, control activities, information and communication processes, and finally, monitoring activities. When considering the chosen sequence, it indicates that the process begins with assessing control objectives or criteria (which could represent "a"), then identifying risks associated with those controls ("b"), followed by evaluating the implementation and effectiveness of control activities ("d"), and concluding with monitoring the overall control environment and making adjustments as necessary ("c"). This approach emphasizes the importance of a thorough understanding of internal controls (the foundation of the audit process), followed by a careful analysis of how these controls are applied and enforced within an organization. Each step builds upon the previous one, ensuring that auditors can identify weaknesses and recommend improvements effectively. By following this structured sequence, auditors can gain a comprehensive understanding of the internal controls in place and provide valuable insights into their effectiveness and areas for enhancement.