Which of the Following Does the Auditor Consider When Determining

question 111

Multiple Choice

Which of the following does the auditor consider when determining the extent of reliance to be placed on internal controls?

• A) assessed level of control risk
• B) the costs of increased tests of controls
• C) effectiveness of the internal controls
• D) all of the above

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Definitions:

Net Income

The total profit of a company after all expenses, including taxes and operational costs, have been deducted from total revenue.

Variable Costs

Expenses that vary directly with the level of production or service delivery.

Fixed Costs

Fixed outgoings, including rent, salaries, and insurance, that are unaffected by production or sales volumes.

Net Income

The total earnings or profit of an individual or business after deducting expenses and taxes.