First, select the choice that best describes the need an independent audit satisfies.

A.

An independent audit is a means of satisfying the need for favorable financial ratios.

B.

An independent audit ensures financing at the lowest rate.

C.

An independent audit ensures that the projected cash flows is accurate.

D. An independent audit is a means of satisfying the need for reliable information on the part of the decision makers. Your answer is correct.

Select a change in accounting and business operations over the last decade that has increased the need for independent audits.

A.

Generally Accepted Accounting Standards.

B.

Increased global activities of many businesses.

Your answer is correct.

C.

Internal auditors are requiring independent audits.

D. Increase in gas prices.

Identify the reason(s) why the factor you selected in the preceding step is important. (Select all that apply.)

A. Multiple product lines and transaction locations.

B. Possibly millions of transactions processed daily via sophisticated computerized systems.

C. Foreign exchange effects on transactions

. D. Owners also managing the daily activities of the company.

E. New accounting standards are issued on a regular basis.

F. Directors not involved in day-to-day operations or decisions.