External Audit and Key External Forces Quiz
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Questions and Answers

What is the main focus of an external audit?

  • Identifying and evaluating trends and events beyond the control of a single firm (correct)
  • Financial statements of a single firm
  • Employee performance within a single firm
  • Internal operations of a single firm

Which of the following is not a category of external forces according to the text?

  • Competitive forces
  • Internal organizational forces (correct)
  • Economic forces
  • Technological forces

What is the purpose of gathering competitive intelligence and information about trends in performing an external audit?

  • To gather information for internal operations of a single firm
  • To formulate strategies for taking advantage of opportunities and avoiding or reducing the impact of threats (correct)
  • To increase employee performance within a single firm
  • To assess the financial performance of a single firm

Which category of external forces includes social, cultural, demographic, and natural environment forces?

<p>Social forces (B)</p> Signup and view all the answers

What is the purpose of revealing key opportunities and threats confronting an organization?

<p>So that managers can formulate strategies to take advantage of the opportunities and avoid or reduce the impact of threats (C)</p> Signup and view all the answers

What is the primary goal of identifying and evaluating external forces in an external audit?

<p>To create strategies to take advantage of opportunities and mitigate threats (D)</p> Signup and view all the answers

What is the first step in the process of performing an external audit according to the text?

<p>Gathering information about economic, social, cultural, demographic, environmental, political, governmental, legal, and technological trends (B)</p> Signup and view all the answers

Which category of external forces includes factors related to government policies and regulations?

<p>Political, governmental, and legal forces (D)</p> Signup and view all the answers

What is the purpose of gathering competitive intelligence and information about economic, social, cultural, demographic, environmental, political, governmental, legal, and technological trends?

<p>To reveal key opportunities and threats confronting an organization (D)</p> Signup and view all the answers

What is the main focus of an external audit according to the text?

<p>Revealing key opportunities and threats confronting an organization (D)</p> Signup and view all the answers

<p>External audit focuses on identifying and evaluating trends and events beyond the control of a single firm â–º reveals key opportunities and threats confronting an organization so that managers can formulate strategies to take advantage of the opportunities and avoid or reduce the impact of threats</p> Signup and view all the answers

<p>External forces can be divided into five broad categories: 1. economic forces 2. social, cultural, demographic, and natural environment forces 3. political, governmental, and legal forces 4. technological forces 5. competitive forces</p> Signup and view all the answers

<p>First, gather competitive intelligence and information about economic, social, cultural, demographic, environmental, political, governmental, legal, and technological trends. â–º A final list of the most important key external factors should be communicated.</p> Signup and view all the answers

<p>External forces can be divided into five broad categories: 1. economic forces 2. social, cultural, demographic, and natural environment forces 3. political, governmental, and legal forces 4. technological forces 5. competitive forces</p> Signup and view all the answers

<p>The process of performing an external audit â–º focuses on identifying and evaluating trends and events beyond the control of a single firm â–º reveals key opportunities and threats confronting an organization so that managers can formulate strategies to take advantage of the opportunities and avoid or reduce the impact of threats</p> Signup and view all the answers

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