The External Auditors

question 50

Multiple Choice

The external auditors:

• A)must not use the work of an internal auditor.
• B)can use the work of an internal auditor at whatever way he/she wants.
• C)can use the work of an internal auditor subject to guidelines outlined in ASA 610.
• D)can use the work of an internal auditor subject to guidelines outlined in IFRS.

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Definitions:

Net income

The profit of a company after all revenues, costs, and expenses have been subtracted, indicating the actual earnings.

Periodic inventory system

An inventory accounting system where updates to inventory levels are made on a periodic basis, rather than each time a sale or purchase occurs.

Physical inventory

The actual counting and recording of merchandise goods and materials held by a business for the purpose of verifying stock levels and value.

End of the period

Refers to the conclusion of an accounting period, at which financial statements are prepared.