What Is the Role of Internal Auditing

question 46

Multiple Choice

What is the role of internal auditing?

• A) To substitute for the external auditor whenever possible
• B) To provide assurance and consulting services to improve an organization's operations
• C) To assist the audit committee in negotiations with the external auditor
• D) To mediate disagreements between the external auditor and corporate management

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Definitions:

External Reporting

The process of providing financial information to external stakeholders, such as investors, creditors, and regulatory bodies.

Contribution Approach

A cost accounting approach that separates fixed and variable costs to determine the contribution margin per unit and understand the impact on net income.

Financial Statements

Documents that provide an overview of a company’s financial condition, including balance sheet, income statement, and cash flow statement.

Sunk Cost

A cost that has already been incurred and that cannot be changed by any decision made now or in the future.