For Which of the Following Audit Procedures Would Sampling Be

question 116

Multiple Choice

For which of the following audit procedures would sampling be most appropriate?

• A)Inquiry.
• B)Observation.
• C)Confirmation.
• D)Analytics.

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Definitions:

Fixed Manufacturing Overhead Standards

Pre-determined benchmarks for the fixed costs involved in the production process, not varying with the level of output.

Budgeted Fixed Manufacturing Overhead

The estimated fixed costs involved in manufacturing that do not change with the level of production or sales volume.

Standard Cost System

A cost accounting system that assigns fixed costs to products based on predefined standards, facilitating budgeting and variance analysis.

Net Operating Income

The profit a business makes after deducting operating costs, but before removing interest and tax expenses.