Audit Documents Record the Results of the Auditor's Evidence-Gathering Procedures

question 61

Multiple Choice

Audit documents record the results of the auditor's evidence-gathering procedures.When preparing audit documents,the auditor should remember that

• A) Audit documents should be kept on the client's premises so that the client can have access to them for reference purposes.
• B) Audit documents should be the primary support for the financial statements being examined.
• C) Audit documents should be considered as a substitute for the client's accounting records.
• D) Audit documents should be designed to facilitate the review and supervision of work done by auditors assigned to the engagement.

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Definitions:

Marginal Product of Labor

The additional output produced as a result of employing one more unit of labor, holding other inputs constant.

Equilibrium Outcome

This term describes a state in a market or game where all participants' actions are balanced, and no incentive exists to deviate from the chosen strategy.

Monopoly Wage Rate

The wage setting behavior of a monopolist employer who might set wages below competitive levels due to lack of competition in the labor market.

Competitive Wage Rate

The equilibrium wage set in a market where the demand for labor meets the supply, with no individual employer able to influence the wage rate.