The Extent of Procedures Is Affected Mostly by Which of the Following

question 60

Multiple Choice

The extent of procedures is affected mostly by which of the following factors?

• A)The sheer volume of procedures to be applied by the auditor.
• B)The time of year in which the client takes a physical inventory in the warehouse.
• C)The auditor's judgment that misstatements are probable in certain balances.
• D)The availability of the client's staff at or near the balance sheet date.

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Definitions:

Fixed Overhead Volume Variance

The difference between the budgeted fixed overhead and the applied amount, revealing how well a company utilized its fixed resources.

Fixed Overhead Budget Variance

The difference between the budgeted and actual fixed overhead costs incurred during a specified period.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production, such as rent, salaries of permanent staff, and depreciation of factory equipment.

Fixed Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs attributed to the variation in produced units.