What Is the Greatest Benefit That Can Be Derived by Discussing

question 90

Multiple Choice

What is the greatest benefit that can be derived by discussing fraud factors with management of the client organization under audit?

• A)Greater credibility with the client organization and its management.
• B)The impression on the client that potential fraud is not being considered by an independent source.
• C)Further consideration of the risks,and discussion of how management can reduce the risks.
• D)Full disclosure of all fraud occurring during the year under audit in the company.

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Definitions:

Target Net Profit

Target net profit is the specific amount of net income that a company aims to achieve within a certain period, guiding pricing, cost management, and sales volume strategies.

Unit Contribution Margin

The difference between the selling price per unit and the variable cost per unit. This figure shows how much each unit contributes to covering fixed costs and generating profit.

Fixed Costs

Expenses that do not change in total as production volume increases or decreases, such as rent and salaries.

Safety Margin

The difference between the actual level of sales or production and the break-even point, measuring the cushion a company has before it incurs losses.