Certified Public Accountants (CPA) Ethics Practice Exam

Which statement best distinguishes ongoing monitoring from auditing?

Monitoring is typically built into operational processes, while auditing is a more formal, objective review that may be independent of the activity being examined Auditing is performed only by government agencies Monitoring always uses statistical samples and auditing never does There is no practical difference

Correct Answer:

Monitoring is typically built into operational processes, while auditing is a more formal, objective review that may be independent of the activity being examined

Explanation:

Monitoring is commonly performed as part of ongoing operations to detect and manage risk, while auditing is a more formal review designed to test compliance and should be objective and appropriately independent.

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