An external auditor finds out what the risks are that management has identified by

a. examine the documentation

b. discussions with internal auditors

c. conduct tests of internal control

d. inquiry of the audit committee

Ans

An external auditor finds out what the risks are that management has identified by:

Sol: a. examine the documentation

Interpretation: External auditors inspect the accounting records and documentation of the client companies and express their opinion as to whether the financial statements are fairly presented in accordance with the Generally Accepted Accounting Principles(GAAP) or International Financial Reporting Standards(IFRS). He or she reports the results to the Audit Committee composed of company executives.