Which of the Following Is a Difference Between Internal Comparison

question 10

Multiple Choice

Which of the following is a difference between internal comparison and external comparison with regard to financial statement analysis?

• A) An internal comparison reveals unexpected relationships within a company, whereas an external comparison reveals the absence of expected relationships outside a company.
• B) An internal comparison involves comparing a company with the industry as a whole, whereas an external comparison involves comparing a company's current performance with its past experience.
• C) An internal comparison is done by an accountant or auditor, whereas an external comparison is done by a forensic accountant.
• D) An internal comparison allows the examination of changes within a company over time, whereas an external comparison reveals the company's relative performance and financial standing.

---

Definitions:

Secondary Information

Data that has been collected previously by someone else, used for research or analysis.

Primary Data

Data that is collected firsthand by the researcher for a specific research purpose or project.

Tertiary Data

Information that has been collected and processed from secondary sources rather than obtained directly from original sources.

Secondary Data

Information that has been collected previously by someone else, used for research purposes other than the original intent.