Which Statement Is Correct Concerning the Relevance of Various Types

question 77

Multiple Choice

Which statement is correct concerning the relevance of various types of controls to a financial statement audit?

• A)An auditor may ordinarily ignore the consideration of controls when a substantive audit approach is used.
• B)Controls over the reliability of financial reporting are ordinarily most directly relevant to an audit,but other controls may also be relevant.
• C)Controls over safeguarding assets and liabilities are of primary importance,while controls over the reliability of financial reporting may also be relevant.
• D)All controls are ordinarily relevant to an audit.

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Definitions:

Process Costing System

An accounting method used to allocate costs to units of product in processes where the products are indistinguishable from each other.

FIFO Method

"First In, First Out," an inventory valuation method that assumes goods are sold in the order they are acquired.

Inventory Costing

The method used to value inventory, including techniques like FIFO (First In, First Out), LIFO (Last In, First Out), and weighted average cost.

FIFO Method

"First In, First Out" method of inventory valuation where the oldest inventory items are recorded as sold first.