Internal Auditor Independence Would Not Be Impaired If the Auditor

question 21

Multiple Choice

Internal auditor independence would not be impaired if the auditor:

• A) made management decisions relating to financial activities.
• B) assumes operating responsibilities.
• C) reports directly to the controller.
• D) reports directly to the treasurer.
• E) makes recommendations based on audit findings.

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Definitions:

Weighted Average Cost of Capital

The average rate of return a company is expected to pay its security holders, weighted by the proportion of each security in the total capital structure.

Preferred Shares

Preferred shares are a type of stock that provides shareholders preferential payments of dividends and priority over common stock in asset liquidation, but generally do not carry voting rights.

Common Shares

Equities that represent ownership in a corporation, providing voting rights and a share in the company's profits through dividends.

Expected Rate of Return

The anticipated amount of profit or loss an investment is projected to generate, given certain assumptions.