To Perform an Audit, It Is Necessary for the Information

question 33

Essay

To perform an audit, it is necessary for the information to be in a verifiable form and there must be some criteria by which the auditor can evaluate the information. Detail the information and criteria that would be used when
(A) an independent CPA firm audits a company's historical financial statements.
(B) an Internal Revenue Service auditor audits that same company's tax return.
(C) an internal auditor performs an operational audit to evaluate whether the company's computerized payroll processing system is operating efficiently and effectively.

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Definitions:

Optimal Quantity

The quantity of a good or service that maximizes a firm's profits or an individual's utility, based on cost and benefit analysis.

Marginal Curve

A graphical representation of the marginal cost, marginal revenue, or marginal benefit of producing additional units of a good or service.

Marginal Cost

The extra expenditure involved in creating one additional unit of a product or service.

Gadgets Production

The manufacturing process of creating small electronic devices designed for a particular purpose or function.