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</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</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</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</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</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</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</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 ► 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. ► 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 ► focuses on identifying and evaluating trends and events beyond the control of a single firm ► 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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