Which of the Following Statements Is True of External Auditing

question 19

Multiple Choice

Which of the following statements is true of external auditing?

• A) Major focus areas are processes, including risks, controls, and effectiveness and efficiency of processes.
• B) External auditors perform both assurance and consulting services for public companies.
• C) Primary scope of services performed includes audits of financial statements.
• D) The primary client for a public company is upper management.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate budgeting.

Activity Index

A measure or indicator used to assess the level or intensity of activity within a certain area or field.

Variable Costs

Expenses that change in proportion to the activity of a business, such as production volume or sales.

Market Value

The current price at which an asset or service can be bought or sold in a marketplace.