The Auditing Standards

question 55

Multiple Choice

The auditing standards

• A)require that the auditor test controls for accounts payable
• B)require that the auditor test controls for expenses
• C)do not tell the auditor which controls must be tested
• D)suggest that controls be tested for accounts payable and expenses

---

Definitions:

Activity Cost Pools

A method in managerial accounting where costs are aggregated according to the activities that incur them, for more accurate allocation.

Product Units

Individual items or outputs produced by a manufacturing or production process.

Materials Handling

The process of handling, safeguarding, storing, and managing materials and goods all through the stages of production, warehousing, distribution, usage, and discarding.

Direct Labor-Hours

The total hours of labor directly involved in producing goods, often used as a basis for allocating overhead in cost accounting.