Which of the Following Exemplifies the Role of an External

question 28

Multiple Choice

Which of the following exemplifies the role of an external auditor?

• A) Victor recorded the transactions entered in to by Trident, Inc. in the proper accounting period.
• B) Victor prepared the annual budget of Trident, Inc., and he also helped the department heads prepare budgets for each department.
• C) Victor evaluated the internal controls of Trident, Inc. and reported on the financial position as at the year end.
• D) Victor conducted an investigation into the affairs of Trident, Inc. to allay suspicions of mismanagement of funds.

---

Definitions:

Total Assets Turnover Ratio

A measure of a firm's efficiency in using its assets to generate sales, calculated by dividing sales by total assets.

Sales

Sales encompass the transactions where goods or services are exchanged for money, representing the revenue generated by a business.

Total Assets

Total assets represent the sum of all assets owned by a company, including both current and non-current assets.

ROE

A financial ratio expressing the profitability of a firm in relation to stockholders' equity, used to assess how efficiently a company uses investments to generate profit.