Which of the Following Statements Is Not True

question 217

Multiple Choice

Which of the following statements is not true?

• A) The nature of consulting services that are performed by the internal audit activity should be defined in the audit charter.
• B) It is inappropriate for internal auditors to provide consulting services relating to operations for which they had previous responsibilities.
• C) A party outside the internal audit activity should oversee assurance engagements for functions over which the chief audit executive has responsibility.
• D) The chief audit executive should decline a consulting engagement if the internal audit staff lacks the knowledge, skills, or other competencies needed to perform all or a part of the engagement.

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Definitions:

Pooling of Interest

An accounting method for mergers and acquisitions where the assets and liabilities of the combining companies are aggregated.

Synergy

The benefit that results when two or more agents work together to achieve something neither could have achieved on their own.

Incremental Net Gain

The increase in net profit resulting from a specific action, taking into account all associated costs and revenues.

Merger or Acquisition

A business strategy where two companies combine (merger) or one company purchases another (acquisition) to enhance competitive strengths or enter new markets.