Certified Government Auditing Professional (CGAP) Practice Exam

Which of the following statements about an audit charter is the exception?

1. It is a formal statement of purpose and authority.

2. Audit charters should always be in writing.

3. All government audit organizations must have an audit charter.

4. The charter should outline the hiring process for auditors.

The correct answer is: All government audit organizations must have an audit charter.

The correct answer highlights that not all government audit organizations are required to have an audit charter. While it is generally accepted and considered best practice for audit organizations to have a formal charter, there may be exceptions based on specific governmental structures or regulations. Consequently, this acknowledges that the necessity of an audit charter can vary depending on the size, complexity, or specific legislative framework governing an organization. Having an audit charter ensures that the purpose and authority of the audit organization are clearly defined, establishing a framework for operations. It must be documented in writing to serve as an official reference point, thereby promoting clarity and accountability. The charter typically outlines various operational aspects, including the scope of work and ethical guidelines, but it does not necessarily mandate the inclusion of procedural details such as the hiring processes for auditors, which can fall under internal human resources policies rather than necessarily being part of the charter.