The Major Factor Affecting the Decision by the Auditor to Perform

question 35

Multiple Choice

The major factor affecting the decision by the auditor to perform substantive procedures during the interim period will be based upon:

• A) staffing considerations.
• B) the cooperation of client personnel, especially internal auditors.
• C) controlling detection risk and cost effectiveness.
• D) the approach followed in the past.

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Definitions:

Fixed Overhead Budget Variance

The difference between actual fixed overhead costs and the budgeted or expected fixed overhead costs.

Volume Variance

A measure of the difference between the budgeted and actual volume of production, impacting costs.

Overhead Variances

The difference between actual overhead costs and the budgeted or standard overhead costs.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to products or job orders, calculated before the costs are actually incurred.