The Evidence Collection Stage of an Operational Audit Includes All

question 79

Multiple Choice

The evidence collection stage of an operational audit includes all the following activities except

• A)reviewing operational policies.
• B)establishing audit objectives.
• C)testing the accuracy of operating information.
• D)testing controls.

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Definitions:

Operating Income

Earnings before interest and taxes, representing the profit gained from a firm's core business operations.

Cash Payback Period

The duration of time it takes for an investment to generate cash flows sufficient to recover the initial investment cost.

Factory Overhead

All manufacturing costs that are not directly associated with the cost of raw materials or direct labor, often including costs related to maintaining factory operations.

Direct Materials

Raw materials directly used in the manufacturing process of a product, easily traceable and integral to the finished good.