Which of the following choices best describes the main role of independent external audit for financial reporting? A) Independent external audit helps agents in getting their principal objectives. B) Independent external audit helps to provide quality signals to principals and helps distinguish superior from inferior agents. C) Independent external audit helps to provide quality signals to agents and helps distinguish superior from inferior principals. D) Independent external audit provides help in the provision of in-house facilities to auditors

Explain an advantage of external audits as compared to internal audits*1 pointAll answers are correctExternal audits are cheaper.External audits are often done by experienced auditors who can more easily identify weaknesses.External audits are less formal and can be more effective as the auditors are familiar with the staff that they are auditing.

Identify which of the following is NOT an advantage of external audits.*1 pointExternal audits are often done by experienced auditors who can more easily identify weaknesses.External auditors can pick up on errors that the business may not know about.External auditors have an unbiased approach to the audit.External audits are cheaper than internal audits.

When sourcing third parties for auditing services, what should organizations consider regarding the auditors' independence?  A. Their relationship with company management  B. Their track record in audit engagements  C. Their independence and impartiality  D. Their adherence to professional codes of conduct

True or false. The independent audit procedure has increased in popularity because there is a mutual benefit to customer and vendor in having an independent audit performed. To the customer, it provides some assurance that the vendor's control environment has been audited. The vendor, then, can say there's been an independent opinion that the customer's data is protected.

Indicate whether the following statement is True or False.One of the differences between the internal and external audit function is that the external auditor focusses on the financial control environment, whereas the internal auditor focusses on the overall internal control environment of an organisation