The Choice of Using Audit Sampling _______

question 4

Multiple Choice

The choice of using audit sampling _______.

• A)is a matter of determining which audit procedure will be most effective, and efficient in the circumstances
• B)is a matter of determining which audit procedure will be most cost effective, and efficient in the circumstances
• C)should be left to the internal auditors
• D)should be confirmed with senior management, before any procedures are undertaken

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Definitions:

Period Cost

Costs that are expensed in the period they are incurred and are not directly tied to production activity.

Indirect Costs

Costs that cannot be directly linked to the production or sale of a specific product or service, such as administration, rent, and utilities.

Manufacturing Overhead

All indirect costs associated with manufacturing beyond direct materials and direct labor, such as utilities and maintenance.

Variable Costs

Costs that vary directly with the level of production or sales volume.