Which of the Following Statements Is NOT True Concerning the Independent

question 46

Multiple Choice

Which of the following statements is NOT true concerning the independent external audit?

• A) The SEC requires all publicly traded companies to have their internal controls audited by external auditors.
• B) Many privately owned companies have their financial statements audited at the request of lenders.
• C) The goal of the external audit is to detect material misstatements.
• D) The auditors are required to check every transaction in order to provide assurance to financial statement users.

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Definitions:

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, typically comprising the balance sheet, income statement, and cash flow statement.

Statement Of Income

A financial statement that shows a company’s revenues, expenses, and profit or loss over a specific time period, often quarterly or annually.

Continuing Operations

Activities and processes that are not scheduled to be discontinued or sold off, representing the ongoing, primary business activities of an entity.

Discontinued Operations

Discontinued Operations refer to segments or components of a business that have been sold, disposed of, or abandoned and are reported separately on the income statement, as their performance is not indicative of ongoing operations.