Which of the Following Procedures Would Not Be Used to Obtain

question 24

Multiple Choice

Which of the following procedures would not be used to obtain an understanding of the entity and its environment?

• A)Observe entity operations.
• B)Re-perform entity processes.
• C)Verify proper evaluation of inventory subject to technological obsolescence.
• D)Review prior year's audit documentation.

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Definitions:

Manufacturing Activities

Tasks and processes involved in converting raw materials into finished goods, often including assembly, fabrication, and quality control.

Time Variance

The difference between the actual time taken to complete a task and the estimated time planned for it.

Direct Labor Hours

The total number of hours worked directly on a product or service by employees, usually used to allocate manufacturing costs.

Price Variances

Differences between actual and expected or standard costs that are attributed to changes in the price of goods or services.