The Primary Role of the Internal Audit Activity in Regard

question 174

Multiple Choice

The primary role of the internal audit activity in regard to an organization's ethical climate is to:

• A) Participate as chief ethics officer.
• B) Periodically assess the ethical climate.
• C) Utilize surveys to evaluate employee ethics.
• D) Demonstrate ethical behavior.

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Definitions:

FIFO

An accounting method used to manage inventory and cost of goods sold where the first items produced or acquired are the first to be sold.

Merchandise sold cost

The total expense incurred to produce or purchase the goods that have been sold to customers.

Perpetual system

An inventory accounting system that records purchases and sales of inventory immediately through the use of technology, offering continuous stock level information.

LIFO

An inventory valuation method that assumes the last items placed in inventory are the first ones sold ("Last In, First Out").