An Internal Auditor Is Researching the Laws and Regulations Related

question 179

Multiple Choice

An internal auditor is researching the laws and regulations related to a city's grant program. Which of the following procedures is least relevant to this task?

• A) Making inquiries of the audit committee about the nature of the grants.
• B) Reviewing prior-year workpapers and asking officials if there have been any changes.
• C) Reviewing applicable grant agreements.
• D) Discussing the matter with the city's chief financial officer, legal counsel, or grant administrators.

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Definitions:

Finished Goods Inventory

This is the account that contains the cost of finished goods that are ready to be sold but are still in stock.

Absorption Costing

Absorption Costing is a method of inventory costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Operating Income

Profit generated from a company's regular business operations, excluding deductions for interest and taxes.

Property Tax Expense

The amount paid by property owners to municipal or local governments based on the assessed value of their property.