While Performing a Follow-Up of a Concern About Equipment-Inventory Tracking

question 76

Multiple Choice

While performing a follow-up of a concern about equipment-inventory tracking, which course of action is not necessary for the auditor to take?

• A) Ensure that the steps being taken resolve the condition disclosed by the initial finding.
• B) Ensure that controls have been implemented to prevent the issue from occurring again.
• C) Ensure that the entity has begun to experience benefits as a result of resolving the issue.
• D) Ensure that the inherent risk has been eliminated as a result of resolving the issue.

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Definitions:

Marginal Cost

The production cost for one more unit of a product.

Marginal Cost Curve

A graphical representation showing how the cost of producing one additional unit of a good varies.

Average Total Cost

The per unit cost of production, computed by dividing the total cost of production by the total quantity of output.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.