Tracing Is a Specific Type of Document Inspection Whereby the Auditor

question 53

Multiple Choice

Tracing is a specific type of document inspection whereby the auditor verifies whether the document:

• A) has been posted to the relevant accounting records.
• B) is supported by appropriate source documents.
• C) is mathematically accurate.
• D) proves ownership of the underlying asset or liability.

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Definitions:

Machine Shop

A workshop where metal is cut, shaped, and finished using machine tools.

Cement Production

The process of creating cement, which involves the extraction and blending of raw materials, followed by their heating and grinding.

Direct Labour Hours

The total number of hours worked by employees directly involved in the manufacturing process or delivery of a service.

Applied Overhead

The allocation of estimated overhead costs to specific products or job orders based on a predetermined rate or formula.