Which the Following Activities Should Be Performed by the Internal

question 182

Multiple Choice

Which the following activities should be performed by the internal audit activity to facilitate an effective relationship with the audit committee? 1. Periodically report about the accounting standards followed by the organization. 2. Provide assurance to the audit committee that its charter, activities, and processes are appropriate. 3. Ensure that the role and activities of the internal audit activity are clearly understood and responsive to the needs of the audit committee. 4. Maintain open and effective communications with the audit committee.

• A) 1 and 2 only
• B) 3 and 4 only
• C) 1, 3, and 4 only
• D) 2, 3, and 4 only

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Definitions:

Future Cash Flows

Estimates of the amount of money expected to be received or paid out by a business in future periods.

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows equal to zero.

Present Value

The current valuation of a future sum of money or cash flows, when evaluated at a given rate of return.

Desired Rate of Return

The return a investor expects to achieve from an investment.