The Statement That Is Most Accurate About the Terminology Applied

question 24

Multiple Choice

The statement that is most accurate about the terminology applied to errors identified when applying tests of controls or substantive testing to an audit sample is:

• A) an error identified in substantive testing is referred to as an irregularity.
• B) an error identified in substantive testing is referred to as a control deviation.
• C) an error identified in a test of controls is referred to as a misstatement.
• D) an error identified in a test of controls is referred to as a control deviation.

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Definitions:

Equivalent Units

A concept used in cost accounting to express the amount of materials, labor, and overhead costs associated with partially completed goods as if they were finished.

Weaving Department

A specialized division in a manufacturing facility where threads are interlaced to make textiles or fabric.

Weighted Average Method

A cost accounting method that averages all costs of inventory available for sale during the period and assigns the average cost to both ending inventory and cost of goods sold.

Equivalent Units

A metric used in cost accounting to express the amount of work done on incomplete units of production in terms of fully completed units.