External Auditors Are Referred to as "External" Because

question 35

Multiple Choice

External auditors are referred to as "external" because:

• A)they report to users outside of the audited entity.
• B)they are paid by parties outside of the audited entity.
• C)they are not employees of the entity being audited.
• D)their offices are not at the entity's place of business.

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Definitions:

Incurred

Refers to the recognition of expenses or liabilities that have been consumed or acquired in the course of business operations.

Accrued Expense

Expenses that have been incurred but not yet paid for, recognized in the financial statements through adjusting entries.

Employees' Salaries

Regular payments made to employees for their service to an organization, typically agreed upon and fixed in a contract.

Comprehensive Insurance

An insurance coverage that protects against a wide range of perils, excluding certain specified exclusions.