Because They Spend All Their Time Within One Company, Internal

question 9

True/False

Because they spend all their time within one company, internal auditors have much greater knowledge about the company's operations and internal controls then external auditors.

Recognize the implications of cognitive biases in decision-making processes.

Understand the concept and examples of non-programmed decision making.

Acknowledge the significance of clear problem definition in decision-making effectiveness.

Understand the effects of information presentation on decision-making biases.

---

Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels, providing a more useful comparison to actual costs.

Variable Costs

Expenses that fluctuate directly with changes in production volume or activity level, such as raw materials and direct labor costs.

Flexible Budgets

Budgets that can adjust or flex for changes in the volume of activity or other relevant factors, allowing for more accurate forecasts and analysis.

Contribution Margin

The selling price per unit minus the variable cost per unit, representing the incremental money generated for each product/unit sold.