The Independent Auditor Should Acquire an Understanding of the Internal

question 23

Multiple Choice

The independent auditor should acquire an understanding of the internal audit function as it relates to the assessment of control risk because

• A) Internal audit programs, audit documents, and reports can eliminate the need for the independent auditor's staff.
• B) The procedures performed by the internal audit staff may eliminate the independent auditor's need for an extensive study and evaluation of internal control.
• C) The work performed by internal audit personnel may be a factor in determining the nature, timing, and extent of the independent auditor's procedures.
• D) The understanding of the internal audit function is an important substantive procedure to be performed by the independent auditor.

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Definitions:

Correlation

A statistical measure that expresses the extent to which two variables change together, but does not imply causation.

Correlation Coefficient

A statistical measure that indicates the extent to which two variables fluctuate together.

Negative Correlation

A statistical relationship between two variables where one variable increases as the other decreases.

Positive Correlation

A relationship between two variables in which both variables move in the same direction.