Current Professional Auditing Standards Prohibit External Auditors from Using Internal

question 14

True/False

Current professional auditing standards prohibit external auditors from using internal auditors for direct assistance on external audits.

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Definitions:

Accounting Profit

Accounting profit is the financial gain calculated by subtracting total explicit costs from total revenue.

Explicit Costs

Direct, out-of-pocket payments for wages, rent, materials, and other inputs necessary for the production of goods or services.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own use, without any direct payment made.

Opportunity Cost

The worth of the best alternative given up to make a choice.