The independent auditor should acquire an understanding of the internal audit function as it relates to the assessment of control risk because
A. Internal audit programs, audit documents, and reports can eliminate the need for the independent auditor's staff.
B. The procedures performed by the internal audit staff may eliminate the independent auditor's need for an extensive study and evaluation of internal control.
C. The work performed by internal audit personnel may be a factor in determining the nature, timing, and extent of the independent auditor's procedures.
D. The understanding of the internal audit function is an important substantive procedure to be performed by the independent auditor.
C. The work performed by internal audit personnel may be a factor in determining the nature, timing, and extent of the independent auditor's procedures.
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________ are integrated systems including hardware, communications network, data base, model base, software base, and the ________ user (decision maker) that collect and interpret information for decision making
A) Marketing information systems (MIS); MIS B) Management information systems (MIS); MIS C) Decision support systems (DSS); DSS D) none of the above
The theoretical value of an asset is the future value of its expected benefits
Indicate whether the statement is true or false
The DRP process typically begins at the ______ level.
A. retail B. customer C. supplier D. demand
Pettijohn Inc.The balance sheet and income statement shown below are for Pettijohn Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over.
Balance Sheet (Millions of $) Assets2016 Cash and securities$ 1,554.0 Accounts receivable9,660.0 Inventories 13,440.0 Total current assets$24,654.0 Net plant and equipment 17,346.0 Total assets$42,000.0 Liabilities and Equity Accounts payable$ 7,980.0 Notes payable5,880.0 Accruals 4,620.0 Total current liabilities$18,480.0 Long-term bonds 10,920.0 Total liabilities$29,400.0 Common stock3,360.0 Retained earnings 9,240.0 Total common equity$12,600.0 Total liabilities and equity$42,000.0 Income Statement (Millions of $)2016 Net sales$58,800.0 Operating costs except depr'n$55,274.0 Depreciation$ 1,029.0 Earnings bef int and taxes (EBIT)$ 2,497.0 Less interest 1,050.0 Earnings before taxes (EBT)$ 1,447.0 Taxes$ 314.0 Net income$ 1,133.0 Other data: Shares outstanding (millions)175.00 Common dividends$ 509.83 Int rate on notes payable & L-T bonds6.25% Federal plus state income tax rate21.7% Year-end stock price$77.69 Refer to the data for Pettijohn Inc.What is the firm's current ratio? A. 0.97 B. 1.08 C. 1.20 D. 1.33 E. 1.47