The Objective of a Fraud Risk Assessment Is to Help

question 22

True/False

The objective of a fraud risk assessment is to help management recognize factors that make an organization most vulnerable to fraud so that management can address those factors to reduce the exposure.

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Definitions:

Direct Labor-Hours

A measure of the total hours worked by employees directly involved in the production process.

Machine-Hours

A measure of production output or activity based on the number of hours that machines are operational.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated based on estimated costs and activity levels.

Machine-Hours

A measure of the amount of time a machine is operated during a specific period, used in cost accounting to allocate expenses to products.