Internal Auditors

question 40

Multiple Choice

Internal auditors

• A)are hired by CPA firms to audit business firms.
• B)are employees of the IRS who evaluate the internal controls of companies filing tax returns.
• C)evaluate the system of internal controls for the companies that employ them.
• D)cannot evaluate the system of internal controls of the company that employs them because they are not independent.

Understand the role of negligence in product liability and the requirement of cause in fact and proximate cause.

Recognize the significance of quality control and the duty to warn in preventing product liability.

Acknowledge the impact of strict liability on promoting product safety.

Understand the criteria for defining a product as defective and the respective liabilities for manufacturing, design, and warning defects.

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Definitions:

Small Table Lamps

Portable lighting devices designed for placement on tables, providing localized light; often used for decoration or task lighting.

Activity-based Costing

A costing methodology that assigns overhead and indirect costs to specific activities, enhancing costing accuracy.

Haircut Cost

A term often used in finance to describe a reduction applied to the value of an asset for the purpose of calculating capital requirements, or margin loans.

Factory Overhead

All indirect costs associated with the manufacturing process, including utilities, maintenance, and depreciation of production equipment, but excluding direct materials and direct labor.