An External Quality Assurance Review Which Was Authorized by the Chief

question 271

Multiple Choice

An external quality assurance review which was authorized by the chief audit executive (CAE) indicated significant findings from the Standards. To whom should the final results of the quality assurance review be reported?

• A) Confidentially to the CAE only
• B) The CAE with copies to the board and senior management.
• C) To the board with copies to the external auditor or regulatory oversight body.
• D) To the senior management with a copy to the board.

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Definitions:

Contribution Margin

The revenue remaining after deducting variable costs, which can be used to cover fixed costs and contribute to profit.

Variable Costs

Costs that change in proportion to the level of production or business activity.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a reasonable scale.

Depreciation Expense

The allocation of the cost of an asset over its useful life to gradually reduce its value on the balance sheet.