Which of the Following Audits Can Be Regarded as Generally

question 73

Multiple Choice

Which of the following audits can be regarded as generally being a compliance audit?

• A) IRS agents' examinations of taxpayer returns
• B) GAO auditor's evaluation of the computer operations of governmental units
• C) an internal auditor's review of a company's payroll authorization procedures
• D) a CPA firm's audit of a public company

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Definitions:

Fixed Costs

Costs that do not change with the level of output or production, such as rent, salaries, or loan payments.

Variable Costs

Costs that change in proportion to the amount of goods or services produced.

Average Total Cost

The sum of all production costs divided by the quantity of output produced, yielding the cost per unit on average.

Output

The complete sum of products or services created by an enterprise, field, or economic entity.