External auditors are referred to as "external" because
A) They report to users outside of the audited entity.
B) They are paid by parties outside of the audited entity.
C) They are not employees of the entity being audited.
D) Their offices are not at the entity's place of business.

Question

Quizplus · Accepted Answer

External auditors are not employees of the entity being audited, which distinguishes them from internal auditors who are employed by the entity. Option A refers to the audience to whom the auditors report, rather than the employment status of the auditors. Option B refers to payment but does not necessarily indicate the employment status or location of the auditors. Option D refers to the location of the auditors' offices, which may or may not be at the entity's place of business, but does not necessarily indicate their employment status.

External Auditors Are Referred to as "External" Because