Auditors Begin Their Assessment of Inherent Risk During the Planning

question 51

True/False

Auditors begin their assessment of inherent risk during the planning phase and update the assessments throughout the audit.

---

Definitions:

Machine Hours

A measure of production time, calculating how long a machine has been in operation, often used to allocate manufacturing overhead.

Direct Labor Hours

The total hours worked by employees directly involved in the production of goods or services.

Direct Labor Dollars

The total cost of workforce labor that is directly involved in the manufacturing or production of goods and services.

Finished Goods Inventory

The total value of all completed products that are ready for sale at the end of an accounting period, part of a company's current assets.