Non-Sampling Risk Is Typically Controlled by a Firm's Quality Control

question 73

True/False

Non-sampling risk is typically controlled by a firm's quality control procedures and the review of audit work performed by a manager or partner on the audit team or an engagement quality control reviewer.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on the predetermined rate.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and included in the direct costs of production.

Variable Overhead

Costs that vary with the level of production or business activity, such as utilities or indirect materials.

Direct Material

Raw materials and components that are directly incorporated into a finished product and can be easily traced to the product.