Which of the Following Is the Essential Purpose of the Audit

question 6

Multiple Choice

Which of the following is the essential purpose of the audit function?

• A)Detection of fraud
• B)Examination of individual transactions to certify as to their validity
• C)Determination of whether the client's financial statement assertions are fairly state
• D)Assurance of the consistent application of correct accounting procedures

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Definitions:

Conversion Cost

Comprises expenses related to transforming inputs into finished outputs, specifically through labor and overhead costs, essential in manufacturing processes.

Direct Labor

The labor or workforce directly involved in the production process of goods or services, whose costs can be directly attributed to the products being manufactured.

Process Cost System

An accounting method used to track production costs for large numbers of identical units that are mass-produced in a continuous fashion.