Analytical Procedures Are Used by the Auditor To

question 45

Multiple Choice

Analytical procedures are used by the auditor to:

• A)focus his or her attention on accounts where possible fraud exists
• B)focus his or her attention on accounts where the possibility of material misstatements is greatest
• C)focus his or her attention on accounts where procedures are inadequate
• D)focus his or her attention on accounts with unexpected change in the current year compared to the prior year

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Definitions:

Standard Labor Cost

The predetermined cost of labor expected under normal conditions, used for setting budgets and evaluating performance.

Payroll Taxes

Mandatory taxes withheld from an employee's earnings by an employer, which are then paid to government agencies.

Direct Labor Rate

The hourly wage paid to workers who are directly involved in the production of goods or services.

Standard Cost

A predetermined cost of manufacturing, selling, or any other operation under normal conditions.