Which of the Following Is an Important Feature of External

question 15

Multiple Choice

Which of the following is an important feature of external auditors?

• A)They are independent of the entity.
• B)They have previous experience managing the entity.
• C)They have an ownership interest in the entity.
• D)They provide many other services to the entity while engaged as auditors.

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Definitions:

Disclosed Principal

A principal whose identity is known to a third party. The third party is aware that the agent is making an agreement on behalf of the principal.

Scope of Authority

The range or extent of power granted to an individual or entity to act on behalf of another, particularly in legal or contractual contexts.

Expressed Agency

An agency created in a written or oral agreement. Also called agency by agreement.

Apparent Agency

An agency relationship created by operation of law when one party, by his actions, causes a third party to believe Experiential Element