When Gaining an Understanding of Their Client, at Which Level

question 53

Multiple Choice

When gaining an understanding of their client, at which level do auditors not usually consider the relevant issues?

• A) audit committee level
• B) economy level
• C) entity level
• D) industry level

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Definitions:

Materials Quantity Variance

The difference between the expected amount of materials needed for production and the actual amount used, affecting production costs.

Standard

Typically refers to an accepted level of quality or achievement that is used as a measure, norm, or model in comparative evaluations.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a specific product and are an integral part of the finished product.

Actual Price

The price at which a good or service is sold in the market, as opposed to its listed or theoretical price.