Which of the Following Statements Is Correct

question 3

Multiple Choice

Which of the following statements is correct?

• A) A specific type of evidence is sufficient by itself to provide reliable evidence to satisfy any audit objective.
• B) Since the auditor performs the analytical procedures, these will be competent evidence even if internal controls provide inaccurate data.
• C) The effectiveness of the client's internal control has a significant effect on the competence of most types of evidence.
• D) Both physical examination and mechanical accuracy are likely to be highly reliable if the internal control structure is ineffective.

---

Definitions:

Departmental Overhead Rate

A method for assigning overhead costs to products based on the specific department's expenses, facilitating more accurate product costing.

Production Volume

The total quantity of products or services produced within a specific period by a business.

Costing Accuracy

This refers to the preciseness and reliability of costing methods used to estimate or determine the actual costs of production, operations, or projects.

Activity-Based Costing Rates

Rates determined by dividing specific overhead costs by the cost drivers associated with those costs, enabling more accurate product cost assessments.