Under GAO (GAGAS) Standards, Independent Auditors Must Report All Instances

question 14

True/False

Under GAO (GAGAS) standards, independent auditors must report all instances of fraud or illegal acts that they discover during the course of an audit.

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Definitions:

Overhead Variances

The difference between actual overhead costs incurred and the standard or budgeted overhead costs.

Variable Overhead

The indirect expenses that fluctuate with the level of production activity, such as utilities for the manufacturing plant.

Overhead Absorption Rate

Budgeted overhead divided by budgeted volume. Also called overhead application rate.

Direct Labor Hours

The total hours worked by employees directly involved in the manufacturing process.