If the Auditor Finds Extensive Control Test Deviations and Significant

question 33

Multiple Choice

If the auditor finds extensive control test deviations and significant misstatements while performing substantive tests of transactions and substantive analytical procedures,

• A) the cost of the audit should decrease.
• B) the auditor will conclude that internal controls are effective.
• C) extensive tests of details of balances will need to be performed.
• D) all of the above.

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Definitions:

Product

A good, idea, method, information, object, or service created as a result of a process and serves a need or satisfies a want.

Split-off Point

The stage in a process where multiple products become separately identifiable, and each can be processed further or sold.

Processing Further

A decision-making process in cost accounting used to determine whether additional costs should be incurred in further processing products before sale.

Joint Production Cost

Costs incurred in the process of producing multiple products simultaneously from the same raw materials or process.