Because of the Need for Objectivity in Internal Audit Activities

question 38

True/False

Because of the need for objectivity in internal audit activities, the Institute of Internal Auditors recommends that the Chief Audit Executive report directly to the corporate controller.

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Definitions:

Revenue Recognition

The accounting principle that dictates the conditions under which revenue is recognized or recorded, primarily focusing on the timing and amount.

Percentage-of-Completion

An accounting method recognizing revenues and expenses of long-term contracts as a percentage of work completed.

Transfer Pricing

The price charged when two parts of the same multinational corporation, often the parent company and a subsidiary in another country, engage in trade with one another.

Transfer Pricing

The setting of prices for transactions between entities under the same corporate umbrella, often used for strategic financial management and tax planning.