Which of the Following Statements Is Not True

question 93

Multiple Choice

Which of the following statements is not true?

• A) Inherent risk is inversely related to the amount of audit evidence whereas detection risk is directly related to the amount of audit evidence required.
• B) Inherent risk is directly related to evidence whereas detection risk is inversely related to the amount of audit evidence required.
• C) Inherent risk is the susceptibility of the financial statements to material error, assuming no internal controls.
• D) Inherent risk and control risk are assessed by the auditor and function independently of the financial statement audit.

---

Definitions:

Conversion Costs

The aggregate of labor and overhead expenses incurred in converting raw materials into finished goods.

Manufacturing Costs

Expenses directly related to the production of goods, including the costs of raw materials, direct labor, and overhead.

Direct Cost

Expenses that can be directly attributed to the production of specific goods or services, such as materials and labor.

Baker's Wages

Baker's wages refer to the compensation paid to bakery workers or bakers for their labor and expertise in producing baked goods.