An Individual or an Organization with Expertise in a Field

question 4

Multiple Choice

An individual or an organization with expertise in a field other than accounting or auditing whose work in that field is used by the auditors to assist in obtaining sufficient appropriate audit evidence ________.

• A)is commonly known as an outside consultant
• B)is typically referred to as a specialist
• C)is not to be relied upon by the auditor
• D)should report to management, not the auditor

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Definitions:

Cost of Goods Sold

Costs directly incurred from the production of goods a company offers for sale, including labor and material costs.

Average Cost Formulas

A method in inventory valuation that calculates the cost of goods sold based on the average cost of all similar items in inventory.

Physical Flow

The tracking of physical units as they move through the production process.

Specific Identification

A method in inventory accounting that tracks the actual cost of specific items sold and in inventory.