The Primary Purpose of the Internal Auditors' Evaluation of Internal

question 10

Multiple Choice

The primary purpose of the internal auditors' evaluation of internal control is to:

• A)Determine if management has planned and implemented activities needed to attain goals and objectives.
• B)Determine the extent of tests of controls needed during field work.
• C)Identify areas for fraud investigation.
• D)Determine if employees have incompatible duties that have compromised the control environment.

Determine the issue price and selling price of financial instruments using simple interest calculations.

Understand the impact of changing interest rates on loans and investments.

Calculate the true rate of return on investments sold before maturity.

Evaluate the financial outcome of different investment or loan strategies under various simple interest scenarios.

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Definitions:

Equipment

Tangible property used in the operation of a business that is not intended for sale in the ordinary course of business.

Acquisition Differential

The disparity between the acquisition cost and the fair market value of the identifiable net assets obtained.

Cumulative Preferred Shares

Type of preferred stocks where dividends accumulate if not paid in a given year, and must be paid out before common stock dividends can resume.

Surplus (Deficit)

The financial position that results when total revenues exceed (surplus) or are less than (deficit) total expenses.