Question

Aarav is an employee of HLC Building, Co. He is currently evaluating and improving risk management for the construction division. Which type of audit is Aarav most likely working on?

1) Compliance audit
2) Financial statement audit
3) Operational audit
4) Internal audit

Answer 1

Aarav is most likely working on a 3) Operational audit.

Step-by-step explanation:

An operational audit focuses on evaluating and improving the efficiency and effectiveness of an organization's operations. Aarav's role in evaluating and enhancing risk management for the construction division aligns with the objectives of an operational audit. This type of audit is concerned with the internal processes, procedures, and risk management practices within a specific business unit or division.

In an operational audit, the emphasis is on identifying areas for improvement in operational activities to enhance overall performance and mitigate risks. Aarav's focus on risk management within the construction division suggests that he is examining and improving the division's operational processes related to risk identification, assessment, and mitigation.

In summary, the nature of Aarav's work at HLC Building, Co., particularly in evaluating and enhancing risk management for the construction division, points towards his involvement in an operational audit.