Reports Issued by CPAs Conducting Audits Subject to the GAO

question 39

Multiple Choice

Reports issued by CPAs conducting audits subject to the GAO standards must include all of the following except:

• A) A description of the scope of compliance testing.
• B) A description of the scope of internal control testing.
• C) A description of any irregularities and illegal acts found.
• D) A description of any sampling methodology and sampling plans used.

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Definitions:

Variable Selling

Costs associated with selling a product that vary with the level of sales activity, such as commissions or shipping fees.

Administrative Expenses

These are the expenses that an organization incurs not directly tied to a specific function such as manufacturing, production, or sales.

Variable Costing

An approach to costing that accounts for just the variable costs of production, including direct materials, direct labor, and variable manufacturing overhead, in the calculation of product costs.

Product Unit Cost

The total cost associated with producing a single unit of a product, encompassing both direct materials and direct labor costs.