When a Client Uses a Service Organization to Process Certain

question 87

Multiple Choice

When a client uses a service organization to process certain transactions (e.g. ,its employee benefit plan) ,the auditor is least likely to obtain an understanding relating to these transactions by

• A)Contacting the service organization to obtain specific information.
• B)Visiting the service organization and performing procedures.
• C)Sending a confirmation request to the service organization.
• D)Obtaining and reading a Type 1 or Type 2 report from the service organization.

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Definitions:

Drones

UAVs are aircraft systems that can be operated from a distance or navigate independently using flight plans programmed into their onboard software.

Average Variable Costs

The total variable costs of production divided by the quantity of output produced, representing the per-unit variable cost of production.

Drones

Unmanned aerial vehicles (UAVs) that are used for various purposes, including surveillance, delivery, or recreation.

TFC

Total Fixed Costs, referring to the sum of all costs that remain constant regardless of the level of output or production.