In Assessing the Objectivity of Internal Auditors,an Independent Auditor Should

question 31

Multiple Choice

In assessing the objectivity of internal auditors,an independent auditor should

• A) Evaluate the quality control program in effect for the internal auditors.
• B) Examine documentary evidence of the work performed by the internal auditors.
• C) Test a sample of the transactions and balances that the internal auditors examined.
• D) Determine the organizational level to which the internal auditors report.

---

Definitions:

Stock Pricing Models

Theoretical models used to determine the fair value of a stock based on future dividends, free cash flow, or other attributes of the company.

Gordon Model

A dividend discount model that values a stock by assuming a constant growth rate in dividends and discounting them back to their present value.

Market Return

The total return on an investment, including dividends and capital gains, as opposed to the annual return.

Supernormal Growth

A period in which a company or economy experiences growth rates significantly above the norm.