Which of the following best defines a regulatory audit?
a) An audit conducted by company employees
b) A review to ensure compliance with laws and regulations
c) An audit focused on financial statement accuracy
d) A voluntary internal assessment
Which authority is responsible for regulatory audits in financial institutions?
a) Internal Auditors
b) Securities and Exchange Commission (SEC)
c) Human Resource Department
d) Company Shareholders
Which type of audit focuses on adherence to external regulations?
a) Financial Audit
b) Operational Audit
c) Compliance Audit
d) Forensic Audit
Regulatory audits are primarily conducted to ensure:
a) Cost reduction in businesses
b) Employee productivity improvement
c) Compliance with laws and policies
d) Higher profit generation
Which of the following is an example of a compliance audit?
a) Analyzing budget variances
b) Reviewing adherence to tax laws
c) Identifying investment opportunities
d) Managing employee promotions
The main purpose of a regulatory audit is to:
a) Detect fraud in financial statements
b) Review management decisions
c) Ensure compliance with government regulations
d) Evaluate stock market performance
Which document often provides guidelines for regulatory audits?
a) Company Balance Sheet
b) Tax Audit Report
c) Government Regulations and Standards
d) Employee Handbook
Which of the following organizations enforces corporate compliance in the United States?
a) Federal Reserve
b) Securities and Exchange Commission (SEC)
c) International Monetary Fund (IMF)
d) World Trade Organization (WTO)
Which agency regulates financial reporting in Pakistan?
a) Federal Board of Revenue (FBR)
b) Securities and Exchange Commission of Pakistan (SECP)
c) International Monetary Fund (IMF)
d) World Bank
Which of the following is a key benefit of compliance audits?
a) Increased expenses for the company
b) Higher employee turnover
c) Improved adherence to legal requirements
d) Reduction in customer base
Which of the following laws requires financial institutions to prevent money laundering?
a) The Sarbanes-Oxley Act
b) The Foreign Corrupt Practices Act
c) The Bank Secrecy Act
d) The Trade Regulations Act
What is the role of external auditors in regulatory audits?
a) To manage the company’s daily operations
b) To review internal business policies
c) To provide an independent assessment of compliance
d) To train employees in financial management
Which of the following is a consequence of non-compliance with regulations?
a) Increased revenue
b) Legal penalties and fines
c) Improved financial performance
d) Greater employee satisfaction
Which regulatory framework governs data protection in the European Union?
a) GDPR (General Data Protection Regulation)
b) SOX (Sarbanes-Oxley Act)
c) IFRS (International Financial Reporting Standards)
d) SEC Act
A company failing a compliance audit may face:
a) Tax exemptions
b) Criminal charges
c) Reduced labor costs
d) Increased government funding
Which type of audit ensures a company’s compliance with tax laws?
a) Operational Audit
b) Tax Audit
c) Financial Audit
d) Internal Audit
What does an environmental compliance audit focus on?
a) Employee work hours
b) Proper financial reporting
c) Adherence to environmental regulations
d) The company’s marketing strategy
Which entity conducts audits of public companies in the U.S.?
a) Financial Accounting Standards Board (FASB)
b) Public Company Accounting Oversight Board (PCAOB)
c) Internal Revenue Service (IRS)
d) American Marketing Association (AMA)
What is the purpose of an IT compliance audit?
a) Review software efficiency
b) Identify security vulnerabilities and ensure compliance
c) Assess employee productivity
d) Evaluate company profits
Which of the following is an example of regulatory non-compliance?
a) Timely tax filing
b) Falsification of financial statements
c) Regular environmental inspections
d) Proper payroll processing
Which audit function ensures anti-money laundering (AML) regulations are met?
a) Financial Audit
b) Compliance Audit
c) Performance Audit
d) Operational Audit
Which organization oversees accounting regulations worldwide?
a) World Trade Organization (WTO)
b) International Accounting Standards Board (IASB)
c) Central Intelligence Agency (CIA)
d) United Nations (UN)
The primary focus of a labor law compliance audit is:
a) Compliance with employment laws and regulations
b) A company’s advertising strategy
c) A company’s production methods
d) Customer satisfaction surveys
Which of the following is a financial compliance requirement?
a) Conducting customer satisfaction surveys
b) Filing tax returns accurately and on time
c) Offering employee bonuses
d) Expanding business operations globally
