What Is the Role of Internal Auditing

question 54

Multiple Choice

What is the role of internal auditing?

• A)to substitute for the external auditor whenever possible
• B)to provide assurance and consulting services to improve an organization's operations
• C)to assist the audit committee in negotiations with the external auditor
• D)to mediate disagreements between the external auditor and corporate management

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Definitions:

Activity-Based Costing

A methodology that assigns production costs to products based on the activities required to produce them, aiming to provide more accurate product costing.

Unit Product Cost

The total cost incurred to produce, store, and sell one unit of a product, including direct materials, direct labor, and allocated overhead.

Activity Rate

The cost driver rate used in activity-based costing to allocate costs more accurately to products or services based on specific activities.

Activity Cost Pool

A category in activity-based costing that aggregates costs incurred from a specific activity, facilitating the assignment of those costs to products or services based on their use of the activity.