Which of the Following Is NOT Characteristic of an External

question 27

Multiple Choice

Which of the following is NOT characteristic of an external audit?

• A) performed by CPAs
• B) primarily used when management suspects embezzlement
• C) performed by an independent organization
• D) verifies that generally accepted accounting principles have been followed
• E) verifies the accuracy and fairness of financial statements

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Definitions:

Profit Center

A profit center is a branch or division of a company that is treated as a separate unit for the purpose of assessing its revenue-generating ability and profitability.

Department Manager

A professional who oversees the operations and employees of a specific department within a company, ensuring goals and objectives are met.

Authority

The authority or capacity to command, make choices, and ensure compliance.

Responsibility Accounting Reports

Financial reports that measure the financial performance of different segments or departments of an organization, attributing revenues and expenses to the managers responsible.