Management Often Uses Internal Controls in the Revenue Process Because

question 58

Multiple Choice

Management often uses internal controls in the revenue process because

• A)the revenue process is highly susceptible to fraud
• B)this makes evidence gathering easier for the auditor
• C)of the large number of transactions in the process
• D)management is required by SAS 99 to use internal controls

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Definitions:

Facility-level Activity

Activities and costs incurred that support the entire company and cannot be traced to individual products or services.

Product-level Activity

Actions or operations that are conducted to support or produce specific products, often analyzed in activity-based costing.

Batch-level Activity

Activities and associated costs that are incurred for every batch produced, regardless of the size of the batch, such as setup costs and inspections.

Unit-level Activity

Operations or activities performed on individual units or items within a production process.