What Are the Five Major Types of External Forces That

question 20

Essay

What are the five major types of external forces that should be examined as part of an external audit? Give an example of each type of force.

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Definitions:

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for changes in balance sheet items to derive cash flow from operating activities.

Depreciation Expense

The method of allocating the cost of a tangible asset over its useful life, representing the reduction in value of an asset over time.

IFRS

International Financial Reporting Standards, a set of accounting rules and standards for financial reporting used across the globe.

Direct Method

A cash flow statement preparation approach that lists major operating cash receipts and payments, providing a clearer view of a company's cash flow from operations.