When Gaining an Understanding of a Client, the Auditor Will

question 44

Multiple Choice

When gaining an understanding of a client, the auditor will consider the risks associated with information technology. Risks associated with information technology include

• A) unauthorized access to computers, software, or data.
• B) errors in programs.
• C) lack of back-up procedures.
• D) all of the above

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Definitions:

Raw Materials Used

The total cost of all raw materials that are converted into finished goods within a reporting period.

Job Order Cost System

An accounting system that assigns costs to specific production jobs or batches and is used in manufacturing businesses where each job is unique.

Direct Labor Cost

Expenses associated with the labor directly involved in the production of goods or services.

Actual Overhead

The actual costs incurred for indirect materials, labor, and expenses in a production process.