AU-C 200A22, Overall Objectives of the Independent Auditor and the Conduct

question 22

Multiple Choice

AU-C 200.A22, Overall Objectives of the Independent Auditor and the Conduct of an Audit in Accordance With Generally Accepted Auditing Standards states auditors should be skeptical if certain situations arise.Which situation is NOT included in those that AU-C 200.A22 presents?

• A)A situation indicates that there is the need for fewer audit procedures.
• B)Audit evidence recently gathered is contradictory to other evidence previously gathered.
• C)New information brings into question the reliability of client documents or responses to auditor inquiries.
• D)Conditions are observed that indicate evidence of possible fraud.

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Definitions:

Activity-Based Costing

A costing method that assigns overhead and indirect costs to related products and services based on their usage of resources.

Selling and Administrative Costs

Expenses related to the selling of products and the management of a business, exclusive of manufacturing costs.

Activity-Based Costing

A method in managerial accounting that assigns costs to products or services based on the activities that go into producing them.

Production Departments

Specific areas or divisions within a manufacturing facility where the actual production or assembly of products takes place.