Which of the following is a use of external audits?
A) Evaluating financial stability
B) Evaluating production efficiency
C) Evaluating sales effectiveness
D) Identifying possible mergers or acquisitions
E) Identifying earnings potential

Question

Quizplus · Accepted Answer

An external audit investigates other organizations for possible merger or acquisition, determines the soundness of a company that will be used as a major supplier, or discovers the strengths and weaknesses of a competitor to maintain or better exploit the competitive advantage of the investigating organization. External audits provide essential feedback control when they identify legal and ethical lapses that could harm the organization and its reputation.

Which of the Following Is a Use of External Audits