If Control Deficiencies Related to Long-Lived Assets Are Identified,the Auditor

question 49

True/False

If control deficiencies related to long-lived assets are identified,the auditor will automatically assess those deficiencies as significant deficiencies.

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Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent or salaries.

Total Fixed Costs

The sum of all costs that remain constant regardless of any change in a company's production volume.

Diminishing Returns

A principle stating that if one input in the production of a commodity is increased while other inputs are held fixed, a point will eventually be reached at which additions of the input yield progressively smaller, or diminishing, increases in output.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out.