Which of the Following Is an Objective of Audits Under

question 47

Multiple Choice

Which of the following is an objective of audits under the Single Audit Act? To ensure that

• A) The entity's financial statements are not affected by immaterial errors or misstatements.
• B) The entity has not committed fraud.
• C) The entity has in place a system of internal control sufficient to ensure that financial statements are prepared in accordance with generally accepted accounting principles.
• D) The entity is satisfying the laws, regulations, and provisions that apply to each specific federal award.

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Definitions:

Economies of Scale

The cost advantage that arises with increased output of a product, as costs are spread over a larger number of goods.

Wealth of Nations

A seminal book by Adam Smith that discusses economic principles and introduces the concept of the “invisible hand” guiding free markets.

Diseconomies of Scale

A situation where, as a firm's production scales up, the costs per unit increase, contrary to economies of scale.

Long-run Total Costs

The total costs incurred by a firm when all factors of production are variable, and the firm can change its scale of operation.