Which of the Following Risks Expose the Auditor to Effectiveness

question 58

Multiple Choice

Which of the following risks expose the auditor to effectiveness losses?

• A)Risk of underreliance,risk of incorrect acceptance.
• B)Risk of overreliance,risk of incorrect rejection.
• C)Risk of underreliance,risk of incorrect rejection.
• D)Risk of overreliance,risk of incorrect acceptance.

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Definitions:

FIFO Method

First-In, First-Out, an inventory valuation method where the first items purchased are the first ones to be removed from inventory.

Units Started and Completed

This term refers to items or products that begin and finish production within a specific accounting period, in the context of manufacturing or process accounting.

Applied Overhead

is an estimate of indirect costs assigned to individual units of production based on a predetermined rate.

Applied Overhead

The portion of overhead costs allocated to specific jobs or production activities based on a predetermined formula or rate.