Independent Auditors Should Consider the Work of Internal Auditors in Their

question 81

Essay

Independent auditors should consider the work of internal auditors in their assessment of control risk.
a.Are internal auditors independent of management?
Explain.
b.What is the difference between the primary objective of the independent auditors and that of internal auditors?
Explain.
c.Discuss the factors that should be considered by the independent auditors in deciding how much,if any,reliance should be placed on the work of the internal auditors.

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Definitions:

Opportunity Loss

The loss of potential gain from other alternatives when one alternative is chosen.

Average Payoff

The mean or expected outcome that results from all possible outcomes of a certain situation or game, weighted by their probabilities.

ARM

Acronym for Advanced RISC Machines; a family of reduced instruction set computing (RISC) architectures for computer processors.

Variance

A measure of the dispersion of a set of data points around their mean, indicating how much the data points differ from the average value.