Which of the Following Factors Should an External Auditor Obtain

question 51

Multiple Choice

Which of the following factors should an external auditor obtain updated information about then assessing an internal auditor's competence?

• A)The reporting status of the internal auditor within the organization.
• B)The educational level and professional experiences of the internal auditor.
• C)Whether policies prohibit the internal auditor from auditing areas where relatives are employed.
• D)Whether the board of directors,audit committee,or owner-manager oversees employment decisions related to the internal auditor.

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Definitions:

Income Before Income Taxes

The profit a company has generated before accounting for income tax expenses, often found on the income statement.

Times Interest Earned Ratio

A financial metric that measures a company's ability to cover its interest obligations with its earnings before interest and taxes (EBIT).

Potential Drop

An anticipated decrease in value or performance, often used in the context of stocks or electrical voltage.

Earnings

The profit a company generates during a particular period, often used as a measure of its financial performance.