When an Auditor Tests a Client's Cost Accounting System,the Auditor's

question 19

Multiple Choice

When an auditor tests a client's cost accounting system,the auditor's tests are primarily designed to determine that

• A) Quantities on hand have been computed based on acceptable cost accounting techniques that reasonably approximate actual quantities on hand.
• B) Physical inventories are in substantial agreement with book inventories.
• C) The system is in accordance with generally accepted accounting principles and is functioning as planned.
• D) Costs have been properly assigned to work in process, finished goods, and cost of goods sold.

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