The Auditor Must Evaluate Whether the Financial Statements Are Consistent

question 79

Multiple Choice

The auditor must evaluate whether the financial statements are consistent with the requirements of the applicable financial reporting framework and must also consider

• A)the overall presentation,structure,and content of the financial statements
• B)the accounting policies selected are consistent with management's policies
• C)the accounting estimates made by management are predictable
• D)whether the financial statements,including the footnotes,represent the underlying transactions in a manner that achieves fair presentation
• E)the financial forecasts made by management are accurate
• F)both A and D
• G)both B and C
• H)both D and E

---

Definitions:

Total Materials Variance

The difference between the actual cost of materials used in production and the standard cost of those materials.

Overhead Controllable Variance

Overhead Controllable Variance refers to the difference between the actual indirect operational expenses incurred and the budgeted or expected overhead costs that could be influenced by management decisions.

Total Overhead Variance

The difference between the actual overhead incurred and the standard overhead assigned to production.

Overhead Variances

The difference between actual overhead costs and the standard (or expected) overhead costs for a period.