The Ultimate Purpose of Assessing Control Risk Is to Contribute

question 39

Multiple Choice

The ultimate purpose of assessing control risk is to contribute to the auditor's evaluation of the:

• A)factors that raise doubts about the auditability of the financial report.
• B)operating effectiveness of internal control policies and procedures.
• C)risk that material misstatements exist in the financial report.
• D)possibility that the nature and extent of substantive tests may be reduced.

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Definitions:

Production Jobs

Tasks or assignments related to the creation or assembly of goods within a manufacturing process.

Profit

The financial gain derived from a business activity after subtracting all expenses, taxes, and costs.

Manufacturing Overhead

Costs, other than direct materials and direct labor costs, that are incurred in the manufacturing process.

Direct Labor Hours

The time spent by workers directly involved in the production process of goods or services, often used to allocate labor costs to products.