An audit to determine whether an entity is following specific procedures or rules set down by some higher authority is classified as a(n)
A) audit of financial statements.
B) compliance audit.
C) operational audit.
D) production audit.

Question

Quizplus · Accepted Answer

A compliance audit is specifically designed to determine whether an entity is following specific procedures or rules set down by some higher authority, such as laws and regulations, contract terms, or internal policies and procedures. Auditors conducting a compliance audit would assess whether the entity is adhering to the established requirements, and any noncompliance would be reported. The other options are not specifically focused on compliance with standards, regulations, or procedures.

An Audit to Determine Whether an Entity Is Following Specific