The Current File of the Auditor's Working Papers Generally Should

question 87

Multiple Choice

The current file of the auditor's working papers generally should include:

• A) a flowchart of the internal controls.
• B) copies of bond and note indentures.
• C) organisation charts.
• D) a copy of the financial statements.

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Definitions:

Economic Order Quantity

The ideal order quantity a company should purchase to minimize its inventory costs including holding, shortage, and order costs.

Carrying Cost

This is the total cost of holding inventory, including storage, handling, insurance, and opportunity costs.

Fixed Cost

Expenses that do not change with the level of goods or services produced by a business, such as rent, salaries, and insurance.

Variable Cost

Costs that change in proportion to the good or service that a business produces.