An Example of a Substantive Test Always Performed for Costs

question 42

True/False

An example of a substantive test always performed for costs and expenses is obtaining detailed analysis of selected accounts and vouching the details to the source data.

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Definitions:

Traceable

Capable of being traced or tracked to a specific source or activity.

Department

A division within a business or organization tasked with particular functions or responsibilities.

Indirect Expenses

Costs that are not directly tied to specific cost objects like products, projects, or departments.

Direct Expenses

Costs that can be directly traced to the production of specific goods or services, such as raw materials and labor.