The Principles Underlying an Audit Conducted in Accordance with Generally

question 11

Essay

The principles underlying an audit conducted in accordance with generally accepted auditing standards are grouped into four categories. The second category is that of "personal responsibility of the auditor." Generally explain what is intended by this principle.

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Definitions:

Sales Budget

A detailed forecast of anticipated sales, often forming the basis for the company's production and marketing plans.

Merchandise Purchases Budget

A financial plan detailing the amount to be spent on acquiring inventory for sale during a certain period.

Budgeted Balance Sheet

A financial statement that projects the financial position of a company at a future date, based on estimated revenues, expenses, and capital expenditures.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overheads - in the cost of a product.