If Inherent Risk and Control Risk Are Low,the Auditor Can

question 35

True/False

If inherent risk and control risk are low,the auditor can set detection risk as high.

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Definitions:

Net Operating Income

Net operating income is the total profit a company generates from its operations, excluding taxes and interest, highlighting operational efficiency.

Absorption Costing

An accounting tactic where the entirety of manufacturing costs—direct materials, direct labor, and manufacturing overhead, both variable and fixed—are included in calculating a product’s cost.

Unit Product Cost

The total expense incurred to produce and deliver one unit of a product, including both direct and indirect costs.

Variable Costing

An accounting technique that entails including only the variable costs of production, like direct materials, labor directly involved in manufacturing, and variable factory overhead, into the pricing of products.