Knowledge of external factors affecting an entity's business is necessary when planning an audit. Which of the following factors would least likely be considered an external factor:
A) interest rates.
B) market demand.
C) Inflation.
D) industry-specific accounting practices.
E) related party transactions.

Question

Quizplus · Accepted Answer

Related party transactions are internal factors as they involve dealings between the entity and its related parties, rather than external market or economic conditions.

Knowledge of External Factors Affecting an Entity's Business Is Necessary