Evaluating the Quality of Client's Internal Audit Function

question 75

Essay

Evaluating the Quality of Client's Internal Audit Function
An external auditor has to assess the quality of the internal audit function and determine whether the internal auditors' work is relevant to the external audit and of sufficient quantity and quality regardless of how the client staffs the internal audit function.Explain?

---

Definitions:

Sales-Type Lease

A lease agreement where the lessor earns interest income over the lease term, treating the transaction like a sale.

Dealer Profit

The margin or financial gain a dealer achieves from the buying and selling of products or securities.

Unearned Interest Income

It is the interest earned on investments or loans that has been recorded but not yet received in cash.

Bargain Purchase Option

A lease agreement provision allowing the lessee to purchase the leased asset at the end of the lease term at a price significantly lower than the expected fair market value.