Which of the Following Statements Is Not Correct

question 147

Multiple Choice

Which of the following statements is not correct?

• A) There are many ways an auditor can accumulate evidence to meet overall audit objectives.
• B) Sufficient appropriate evidence must be accumulated to meet the auditor's professional responsibility.
• C) It is appropriate to minimize the cost of accumulating evidence.
• D) Gathering evidence and minimizing costs are equally important considerations that affect the approach the auditor selects.

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales, such as rent, salaries, and insurance premiums.

Total Fixed Costs

Expenses that do not change with the level of production or sales over a short period, including rent, insurance, and salaries.

Activity Level

In cost accounting, this refers to the volume of production or operations, impacting variable costs and potentially influencing budgeting and performance measures.

Contribution Margin

The contribution margin is the difference between sales revenue and variable costs, showing how much revenue contributes to fixed costs and profit.