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CPA Accountant Review Questions

Category - Specialized Forensic Knowledge

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Which of the following information does an external auditor rely on?
  1. Financial statements
  2. Grapevine communication
  3. Discussions with senior management
  4. Discussions with every member of staff
  5. All of the above
Explanation
Answer: E - An external auditor relies on all the above-mentioned information. The approach varies based on the information sought. Financial statements are a must to consider because of the inherent role of the external auditor. In addition, discussions with senior management and members of the staff also provide pertinent information. Informal discussions with staff members include grapevine communications.
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