Operational Audits Are Primarily Geared Towards Improving a Company's Operational

question 12

True/False

Operational audits are primarily geared towards improving a company's operational efficiency and effectiveness.

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Definitions:

Accounting Profit

The financial profit of a business calculated by subtracting total expenses from total revenue, as shown in the company's income statement.

Economic Profit

A measure of profitability calculated by subtracting both explicit and implicit costs from total revenues, reflecting the true economic performance of a business.

Implicit Costs

Represent the opportunity costs of using resources that a firm already owns for production, instead of allocating them for other purposes.

Economic Profits

The margin between total earnings and all incurred costs, accounting for both obvious and concealed expenses.