Which One of the Following Statements Is NOT Correct

question 83

Multiple Choice

Which one of the following statements is NOT correct?

• A) Internal controls vary from company to company; therefore, the auditor must identify the controls and deficiencies for each organisation.
• B) The auditor must perform tests of controls on all of the client's internal controls.
• C) The tests of controls and substantive tests of transactions are combined where appropriate.
• D) The substantive tests of transactions will vary depending on the assessed control risk.

---

Definitions:

Manufacturing Costs

Expenses directly related to the production of goods, including direct labor, direct materials, and manufacturing overhead.

Selling and Administrative Expenses

Costs related to the selling of products and the general administration of a business.

Differential Income

The difference in income between two alternative decisions or scenarios, used in managerial decision-making to determine the better financial option.

Variable Cost

Expenses that change in proportion to the amount of goods produced or the volume of sales.