State the Three Main Reasons Why It Is Essential That

question 6

Essay

State the three main reasons why it is essential that working papers be thoroughly reviewed by another member of the audit firm at the completion of the audit.

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Definitions:

Monopoly Result

The outcome of having a single seller in a market, which can lead to higher prices and less consumer choice.

Economies of Scale

The cost advantage companies achieve due to an increase in production, leading to a reduction in the per-unit cost.

Diseconomies of Scale

A condition in which an increase in production leads to higher long-term average costs, contrary to economies of scale.

Licensing

The process through which a company grants permission to another entity to use its intellectual property, technology, or product specifications under agreed terms.