The Purpose of an Internal Auditor's Review for Effectiveness of the Internal

question 3

Multiple Choice

The purpose of an internal auditor's review for effectiveness of the internal control structure is to ascertain if:

• A) the system is functioning efficiently and economically.
• B) the system is functioning as intended.
• C) financial and operating data are reliable.
• D) the entity's goals and objectives have been achieved.

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Definitions:

Payout Policy

The strategy a company uses to decide how much money it will distribute to shareholders through dividends or stock buybacks.

Long-Term Options

Options contracts with an expiration date longer than one year, offering the right to buy or sell an underlying asset at a set price in the future.

Strike Price

The predetermined price at which the holder of an option can buy or sell the underlying asset.

Call Option

A financial contract giving the buyer the right, but not the obligation, to buy an asset at a specified price within a specified time.