Which of the Following Is the Objective of an External

question 18

Multiple Choice

Which of the following is the objective of an external auditor?

• A) form an opinion on the overall financial statements taken as a whole
• B) capture and record all economic transactions of the organization
• C) ensure compliance with policy and procedures; offer recommendations for improvement of internal controls
• D) address a specific question/issue

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Definitions:

Corporate Formation

Corporate formation refers to the legal process involved in creating a corporate entity or company, which includes filing the necessary documents with state authorities and fulfilling all legal requirements to start business operations.

Taxable Gain

The profit that is subject to taxation, realized from the sale of assets or investments.

FMV

Fair Market Value; an estimate of the market value of an asset, based on what a willing buyer would pay to a willing seller.

Subchapter S Corporation

A type of corporation that meets specific Internal Revenue Code requirements, offering the benefits of limited liability of a corporation but is taxed as a pass-through entity.