Which of the Following Is a Main Function of Internal

question 20

Multiple Choice

Which of the following is a main function of internal auditing in multinational corporations?

• A) Preparing the annual report to corporate shareholders
• B) Selecting independent members for the board of directors
• C) Helping external auditors with the financial statement audit
• D) Monitoring risks and assessing their effect on the company

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Definitions:

Encumbrances

Claims, liens, or charges on property or funds that affect or limit their use until the encumbrance is lifted.

Accounts Payable

Liabilities to creditors that are short-term financial obligations arising from purchasing goods or services on credit.

Accrual Basis

An accounting method that records income and expenses when they are earned or incurred, regardless of when the cash is actually received or paid.

Internal Service Funds

Funds used by a government or organization to account for the financing of goods or services provided by one department to other parts of the organization, on a cost-reimbursement basis.