Why Does the Auditor Divide the Financial Statements into Segments

question 54

Multiple Choice

Why does the auditor divide the financial statements into segments around the financial statement cycles?

• A) Most auditors are trained to audit cycles as opposed to entire financial statements.
• B) The approach aids in the assignment of tasks to different members of the audit team.
• C) The cycle approach is required by auditing standards.
• D) The cycle approach allows the auditor to detect illegal acts.

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Definitions:

Labor Costs

The total amount of financial compensation, benefits, and taxes a company pays for its employees' work.

Temporary Help Agencies

Organizations that supply temporary employees to businesses for short-term assignments or to cover for absent employees.

Internal Transfers

The process or activity of moving employees from one position, department, or location to another within the same organization.

Road Construction

The process of building and maintaining roadways, including excavation, pavement, and infrastructure installation.