Which Audit Involves Gathering Evidence to Determine Whether the Person

question 63

Multiple Choice

Which audit involves gathering evidence to determine whether the person or entity under review has followed the rules, policies, procedures, laws and regulations with which they must conform?

• A)A compliance audit
• B)A performance audit
• C)An integrated audit
• D)An internal audit

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Definitions:

Variable Costing

An accounting method that includes only variable costs - costs that change with production levels - in product cost calculations.

Net Operating Income

It refers to the profit generated from a company's ordinary, core business operations after subtracting operating expenses from operating revenues.

First Year

The initial year of operation, production, or accounting period.

Absorption Costing

An accounting method that integrates all costs associated with manufacturing, from direct materials and labor to variable and fixed overheads, into the final cost of a product.