Answer the following statements true (T) or false (F)

Question

1. The practice of evaluating financial ratios to determine an organization's financial health is called viability analysis. 
2. The task of external auditors is to verify that the organization, in preparing its financial statements, followed generally accepted accounting principles. 
3. An internal audit is a verification of an organization's financial accounts and statements by the organization's own professional staff. 
4. A principle of Deming management is that quality should be aimed at the needs of the worker. 

Answer 1

1. FALSE
Managers often use ratio analysis, the practice of evaluating financial ratios, to determine an organization's financial health.
2. TRUE
External auditors are certified public accountants (CPAs) who work for an accounting firm that is independent of the organization being audited. Their task is to verify that the organization, in preparing its financial statements and in determining its assets and liabilities, followed generally accepted accounting principles.
3. TRUE
An internal audit is a verification of an organization's financial accounts and statements by the organization's own professional staff.
4. FALSE
One of Deming's principles is that quality should be aimed at the needs of the consumer. "The consumer is the most important part of the production line," Deming wrote. Thus, the efforts of individual workers in providing the product or service should be directed toward meeting the needs and expectations of the ultimate user.