Which of the Following Best Describes the Reason Why an Independent

question 4

Multiple Choice

Which of the following best describes the reason why an independent auditor reports on financial statements?

• A)A management fraud may exist and it is more likely to be detected by independent auditors.
• B)Different interests may exist between the company preparing the statements and the parties using the statements.
• C)A misstatement of account balances may exist and is generally corrected as the result of the independent auditor's work.
• D)A poorly designed internal control system may be in place.

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Definitions:

Protectionist Policies

Economic policies designed to restrict international trade to protect domestic industries from foreign competition.

Domestic Surplus

The extra quantity of a good that producers are willing to supply over what is demanded by domestic consumers, often measured when analyzing the impact of international trade.

Tariffs

Taxes on imported goods, implemented by a government to protect domestic industries from foreign competition or to generate revenue.

Textiles

Materials made from fibers, filaments, threads, or yarns, suitable for use in the production of fabrics and other goods.