Which of the Following Factors Should an External Auditor Obtain

question 11

Multiple Choice

Which of the following factors should an external auditor obtain updated information about when assessing an internal auditor's competence?

• A)The reporting status of the internal auditor within the organization.
• B)The educational level and professional experiences of the internal auditor.
• C)Whether policies prohibit the internal auditor from auditing areas where relatives are employed.
• D)Whether the board of directors, audit committee, or owner-manager oversees employment decisions related to the internal auditor.

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Definitions:

Joint Costs

Costs incurred in producing products up to a split-off point, where multiple products are generated from the same process and the costs cannot be separately identified for each product.

Physical Units Method

This method calculates the cost per unit of production based on the physical units produced, commonly used in inventory costing and job costing.

Split-Off Point

The stage in a production process where multiple products become separately identifiable.

Overhead Costs

Expenses that are not directly tied to a specific product or service but are necessary for running a business, such as rent and utilities.