An Independent Auditor Might Consider the Procedures Performed by the Internal

question 41

Multiple Choice

An independent auditor might consider the procedures performed by the internal audit function because:

• A)they are employees whose work must be reviewed during substantive testing.
• B)they are employees whose work might be relied upon.
• C)their work impacts the cost/benefit tradeoff in evaluating inherent limitations.
• D)their degree of independence may be inferred by the nature of their work.

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Definitions:

Income

The money received, especially on a regular basis, for work or through investments.

Liability

A company's financial debt or obligations that arise during business operations, to be settled over time through the transfer of economic benefits.

Owner Contribution

Capital injected by the owners into the business, increasing equity.

Creditor

An individual or institution that lends money or extends credit to another party, expecting to be repaid the principal amount along with interest or to receive goods and services.