Many Organizations Have an Internal Audit Function That Makes Periodic

question 66

Multiple Choice

Many organizations have an internal audit function that makes periodic reviews of each department within the organization.The focus of these reviews is to:

• A)Conduct an investigation of each department to be sure fraud is not taking place
• B)Evaluate the efficiency and effectiveness of the department
• C)Evaluate the performance of the manager of the department
• D)Report to the organization's top managers and board of directors

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated by dividing current assets by current liabilities.

Current Assets

Resources a business plans to change into cash, dispose of, or use up within either a year or its operating cycle, depending on which period extends further.

Current Liabilities

Financial obligations of a business that are due and payable within one year.

Total Liabilities

The sum of all financial obligations a company owes to outside parties, including loans, accounts payable, and mortgage obligations.