Which of the Following Is not an Example of a Likely

question 8

Multiple Choice

Which of the following is not an example of a likely adjustment in the auditors' overall audit approach when significant risk is found to exist?

• A)Apply increased professional skepticism about material transactions.
• B)Increase the assessed level of detection risk.
• C)Assign personnel with particular skill to areas of high risk.
• D)Obtain increased evidence about the appropriateness of management's selection of accounting principles.

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Definitions:

Estimated Annual Costs

A forecast of the total costs a company expects to incur over a year, including fixed and variable expenses.

Expected Annual Activity

The anticipated level of operations or production for a business during a one-year period.

Predetermined Overhead Rate

A rate used to assign manufacturing overhead costs to products or job orders, calculated based on estimated overhead costs and an allocation base.

Direct Labor Cost

The total cost of work done by employees who are directly involved in the manufacturing of a product.