During the Planning Phase of the Audit, Auditors Estimate the Monetary

question 98

Multiple Choice

During the planning phase of the audit, auditors estimate the monetary amounts that are large enough to make a difference in decision making.This amount is referred to as:

• A)Risk
• B)Materiality
• C)Substantive
• D)Sampling

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Definitions:

Total Overhead Variance

The difference between the actual overhead costs incurred and the overhead costs that were budgeted or applied based on a standard cost system.

Overhead Controllable Variance

Overhead controllable variance refers to the difference between expected controllable overhead costs and the actual costs directly managed by a department or manager.

Overhead Volume Variance

A measure used to evaluate the difference between expected and actual overhead costs, based on the volume of goods produced.

Materials Price Variance

The difference between the actual cost of materials used in production and the standard cost that was expected or budgeted.