The five major types of external forces that should be examined as part of an external audit: (1) economic forces; (2) social, cultural, demographic, and environment (SCDE) forces; (3) political, governmen- tal, and legal forces; (4) technological forces; and (5) competitive forces. Provide detailed descriptions and specific examples of each type of force.

1)economic forces;An auditor must evaluate how current economic conditions affect a company.Economic factors have a direct impact on the potential attractiveness of various strategies. For example, if interest rates rise, then funds needed for capital expansion become more costly or unavailable.2.The key economic variables that a firm should monitor include the availability of credit level of disposable income, propensity of people to spend, interest rates; 

2)social, cultural, demographic, and environment (SCDE) forces; This refers to the immediate physical and social setting in which people live or in which something happens or develops.New trends in the way people live and work are creating a different type of consumer and, consequently, a need for different products, services, and strategies.For example as the population becomes more educated,the kind of strategies needed for lets say advertisement will need to to be at per.Environmental forces such as flooding can have a direct impact on business as well.

3)political, governmental, and legal forces;This involves changes in legislation or laws which may have an impact on the business.Changes in patent laws or tax rates can affect firms significantly as they will have to change their strategy and business operations to be in line with the laws and regulations.For industries and firms that depend heavily on government contracts or subsidies, the political state in the country might affect their business.

4)technological forces- An auditor can take into account changes in technology when evaluating a company. For examples sinee the introduction of the internet,it has eased the work of retailers as a majority of them are now selling their products online which has helped in diversifying business.

5)competitive forces-  An important part of an external audit is identifying rival firms and determining their strengths, weaknesses, capabilities, opportunities, threats, objectives, and strategies.Collecting and evaluating information on competitors are essential for successful strategy formulation.For example if your rivals have adopted the use of new technology then your business needs to catch up with the technology so that you can compete fairly with your rivals.