Independence Means That the Auditor

question 18

Multiple Choice

Independence means that the auditor:

• A)must be impartial with respect to the client.
• B)must adopt the attitude of a detective during the audit.
• C)has an obligation solely to third parties.
• D)cannot provide any other professional services to an audit client.

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Definitions:

Indirect Labor

Labor costs attributed to anything other than the direct manufacturing of goods or provision of services, such as maintenance, supervision, and administrative tasks.

Factory Utilities

Expenses incurred for electricity, gas, water, and sewage services used in the operation of a manufacturing plant or factory.

Plantwide Overhead Rate

A single rate used to allocate manufacturing overhead costs to all units produced, regardless of the department in which they were made.

Labor Intensive

A process or industry that requires a large amount of labor to produce its goods or services, as opposed to being heavily automated.