Audit Failure Is the Failure of an Audit to Uncover

question 161

Multiple Choice

Audit failure is the failure of an audit to uncover a _______ and the expected cost of an audit failure is the ________ .

• A)mistake; cost of the mistake
• B)mistake; expected cost of the mistake
• C)theft; expected cost of the theft
• D)theft; cost of the theft

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Definitions:

Labor Rate Variance

The difference between the actual cost of labor and the budgeted cost, indicating how well a company has controlled its labor costs.

Labor Efficiency Variance

The difference between the actual hours worked by employees to produce goods and the expected hours, used to measure workforce efficiency.

Variable Overhead Rate Variances

The difference between the actual variable overhead incurred and the standard variable overhead allocated to production, indicating cost control efficiency.

Lubricants

Oils, greases, and other substances used to reduce friction between mechanical parts.