An Audit to Determine Whether the Auditee Is Following Specific

question 21

Multiple Choice

An audit to determine whether the auditee is following specific procedures or rules set down by some higher authority is classified as:

• A) a production audit.
• B) an operational audit.
• C) an audit of financial statements.
• D) a compliance audit.

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Definitions:

Indirect Labor Costs

Costs associated with employees who do not directly work on the product but are necessary for the manufacturing process.

Work in Process

Inventory consisting of items that are in the process of being manufactured but are not yet complete.

Raw Materials Transactions

Activities and records pertaining to the purchase, usage, and inventory management of raw materials used in the production process.

November

The eleventh month of the year in the Gregorian calendar, marking the late autumn in the Northern Hemisphere and late spring in the Southern Hemisphere.