PA Has Set Acceptable Audit Risk at 5% and Determined

question 22

Multiple Choice

PA has set acceptable audit risk at 5% and determined that inherent risk and control risk is at 100%.What is the detection risk?

• A)5%
• B)50%
• C)95%
• D)20%

Understand the strategic implications of choosing between variable and absorption costing for internal management analysis.

Understand the difference between absorption costing and variable costing and how each affects operating income.

Comprehend how production levels affect operating income under both costing methods.

Recognize the components and significance of contribution margin in decision-making.

---

Definitions:

Deadline

A specific time or date by which a task must be completed or submitted.

Stress

A condition of emotional or psychological stress caused by challenging or difficult situations.

Pressure

The feeling of stress or tension that arises from challenging situations or the expectation to perform at a certain level.

Social Readjustment

The process of adapting or adjusting to changes in social relationships or roles.