Which of the following is a difference between internal comparison and external comparison with regard to financial statement analysis?

A) An internal comparison reveals unexpected relationships within a company, whereas an external comparison reveals the absence of expected relationships outside a company.
B) An internal comparison involves comparing a company with the industry as a whole, whereas an external comparison involves comparing a company's current performance with its past experience.
C) An internal comparison is done by an accountant or auditor, whereas an external comparison is done by a forensic accountant.
D) An internal comparison allows the examination of changes within a company over time, whereas an external comparison reveals the company's relative performance and financial standing.

D
Explanation: D) An internal comparison involves comparing the subject company's current performance and financial condition with its past experience. Such comparisons allow the examination of changes within a company over time. In contrast, external comparisons involve comparing the subject company with similar companies or with the industry as a whole (industry averages). Such comparisons reveal the company's relative performance and financial standing.