Which of the Following Is the Primary Reason the Chief

question 412

Multiple Choice

Which of the following is the primary reason the chief audit executive should consider the organization's strategic plans when developing the annual audit plan?

• A) Strategic plans reflect the organization's business objectives and overall attitude toward risk.
• B) Strategic plans are helpful to identify major areas of activity, which may direct the allocation of internal audit activity resources.
• C) Strategic plans are likely to show areas of weak financial controls.
• D) The strategic plan is a relatively stable document on which to base audit planning.

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Definitions:

Department B

A designated segment within a larger organization, often referred to in context with its specific function or performance.

Departmental Overhead Rate

a specific type of overhead rate calculated for individual departments within a company, allowing for more accurate allocation of overhead costs based on departmental activities.

Departmental Overhead Rate

The rate at which indirect costs are allocated to different departments within a company, often used for costing purposes.

Direct Labor Hours

The total number of hours worked by employees directly involved in manufacturing a product or providing a service, often used in calculating labor cost and efficiency.