In Making Judgments About the Effect of the Internal Auditors

question 69

Multiple Choice

In making judgments about the effect of the internal auditors' work on the external auditor's procedures in specific audit areas,which of the following is not among three issues related to the audit areas that should be considered by the external auditor?

• A)Materiality of the financial statement amounts.
• B)Risk of material misstatement of the assertions related to these financial statement amounts.
• C)Review of quality of audit policies,programs,and procedures.
• D)Degree of subjectivity involved in the evaluation of the audit evidence gathered in support of the assertions.

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Definitions:

Transaction Price

The price agreed upon by a buyer and seller for the exchange of goods or services, often noted in a contract.

Promised Goods

Goods that a seller has agreed to deliver to a buyer under a contract or sales agreement.

Consignment

A business arrangement in which goods are entrusted to a third party to sell, with payment occurring only after the sale.

Economic Benefits

The potential profitable returns or advantages that can be obtained from an economic activity or resource.