The Purpose of Test Data Is to Determine Whether

question 7

Multiple Choice

The purpose of test data is to determine whether

• A)The audit team's test data are consistent with the client's normal transactions.
• B)Controls operate as described in responses to internal control questionnaire items and program flowcharts.
• C)Every possible error is prevented or detected by the client's computer controls.
• D)All possible combinations of valid data are correctly processed.

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Definitions:

Indirect Materials

Materials used in the support of the production process that are not easily traced to specific products, essential for maintaining production equipment.

Favorable Variance

A financial term indicating that actual costs were less or actual revenues were more than what was budgeted or forecasted.

Variable Cost

Variable costs vary directly with the level of production output, including expenses like raw materials and direct labor.

Flexible Budget

A dynamic budget that recalibrates based on fluctuations in operational volume or activity.