If a Company Has an Effective Internal Audit Department

question 35

Multiple Choice

If a company has an effective internal audit department,

• A) the internal auditors can express an opinion on the fairness of the financial statements.
• B) their work cannot be used by the external auditors per PCAOB Standard 5.
• C) it can reduce external audit costs by providing direct assistance to the external auditors.
• D) the internal auditors must be CPAs in order for the external auditors to rely on their work.

---

Definitions:

Mineralocorticoids

A class of corticosteroids that help control electrolyte and water balance in the body, primarily produced by the adrenal glands.

Adrenal Cortex

The outer portion of the adrenal gland that produces steroid hormones which regulate metabolism, immune response, and other essential functions.

Adrenocortical Insufficiency

A condition where the adrenal cortex produces insufficient steroid hormones, such as cortisol and aldosterone.

Addison Disease

A hormonal disorder that occurs when the adrenal glands produce insufficient amounts of certain hormones, notably cortisol and aldosterone.