The Auditor Uses the "Inspection" Procedure When He

question 73

Multiple Choice

The auditor uses the "inspection" procedure when he

• A)examines records or documents in paper form
• B)examines records or documents in electronic form
• C)performs substantive testing on risky balances
• D)performs substantive testing in the risky accounts
• E)performs analytical procedures in the risky accounts
• F)both A and B
• G)both B and C

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Definitions:

Average Costs

Calculated by dividing total costs by the total number of units produced, indicating the cost on a per-unit basis.

Produced Units

The number of units of a product that have been completed by a manufacturing process during a specific period.

Relevant Range

The level of activity or volume over which the specific cost assumptions (fixed and variable costs) are valid.

Total Variable Cost

The sum of all costs that vary directly with the level of production or output.