Alvita works for a company that extracts minerals from the ground. Her new CEO wants to be sure the company can keep extracting minerals and continue to work with landowners to get mineral rights for many years. The CEO asks Alvita to audit how the likely the company will be able to sustain its operations long-term. What should Alvita keep in mind while conducting this audit?
A)She needs to realize she is subject to more regulation than if she were conducting a financial audit.
B)She will need to report her results in the same format as any other audit.
C)She should consider company profits, the local people, and the local environment.
D)She can ignore financial and profitability data for the purposes of this audit.
E)She should do what pleases the local landowners, even if it is not profitable.

Question

Quizplus · Accepted Answer

While conducting an audit on the company's ability to sustain its operations long-term, Alvita should consider multiple factors including company profits, local people, and the local environment. It is important that she does not ignore financial and profitability data, as it is crucial to the sustainability of the company. Regulation may be a factor, but not necessarily more so than in a financial audit. There is no specific format that must be followed for this type of audit. Pleasing local landowners should be considered, but not at the expense of the company's profitability and sustainability.

Alvita Works for a Company That Extracts Minerals from the Ground