Auditors Should Evaluate New Controls Associated with All of the Following

question 52

Multiple Choice

Auditors should evaluate new controls associated with all of the following except:

• A) new product lines
• B) new sources of revenues
• C) management's response to new accounting standards for revenue transactions
• D) related changes in personnel
• E) all of the above

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Definitions:

Price of Capital

The cost associated with acquiring capital, including the interest or dividends paid to access funds or the rental rates paid for physical capital.

Marginal Resource Cost

Marginal resource cost refers to the additional cost incurred by employing one more unit of a resource, such as labor or capital, in production.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource or factor of production.

Employment

The condition of having paid work; the extent to which available labor resources are being utilized in the economy.