The Objective of an Audit Is To

question 75

Multiple Choice

The objective of an audit is to:

• A) provide assurance that the financial report is free from error.
• B) express an opinion on whether the financial reports are prepared in accordance with an applicable financial reporting framework.
• C) express an opinion on the financial statements.
• D) provide assurance that the financial reports are free from error and fraud.

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Definitions:

Raw Materials Inventory

The total cost of all the materials kept in stock that have not yet been used in manufacturing.

Net Operating Income

The total profit of a company after operating expenses are subtracted from operating revenues but before deducting taxes and interest.

Materials Quantity Variance

The deviation found by multiplying the standard cost per unit with the difference in the actual and expected standard volumes of materials used in the production process.

Materials Price Variance

A financial measure used to determine the variation in the cost of raw materials against the pre-defined standard cost.