Why Might the Decisions About Materiality and Risks Be Different

question 21

Multiple Choice

Why might the decisions about materiality and risks be different for the internal auditor than for the external auditor when conducting an audit of a system?

• A)The auditors are applying different skills during the conduct of the audit.
• B)External auditors have different expectations with respect to quality control.
• C)Internal auditors focus only on the potential for dollar errors internally.
• D)External users may have different needs than management.

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Definitions:

Domestic Output

The aggregate monetary value of goods and services created within a country's borders throughout a specified period.

Discrimination Coefficient

A measure used to quantify the extent to which prices are adjusted based on customer characteristics in markets where price discrimination occurs.

African Americans

A racial or ethnic group in the United States characterized by an ancestry linked to Africa, particularly sub-Saharan Africa.

Wage Differential

The variation in wages earned by individuals in different jobs, industries, geographic locations, or by workers with varying skill levels.