The Audit Program Prepared by the Independent Auditors Prior to the Start

question 21

Multiple Choice

The audit program prepared by the independent auditors prior to the start of field work is considered appropriate documentation of

• A)Planning.
• B)Supervision.
• C)Information evaluation.
• D)Quality assurance.

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Definitions:

Departmental Predetermined Rates

These are rates used to allocate indirect costs to various departments based on estimated overhead and expected activity.

Machine-Hours

A measure of the amount of time machinery is in operation, used in manufacturing to allocate costs based on machine usage.

Overhead Rate

The rate at which overhead costs are allocated to products or services, typically based on direct labor hours, machine hours, or another allocation base.

Direct Labor-Hours

The total hours worked directly on manufacturing goods or providing services.