Many Organizations Have an Internal Audit Function That Makes Periodic

question 66

Multiple Choice

Many organizations have an internal audit function that makes periodic reviews of each department within the organization.The focus of these reviews is to:

• A)Conduct an investigation of each department to be sure fraud is not taking place
• B)Evaluate the efficiency and effectiveness of the department
• C)Evaluate the performance of the manager of the department
• D)Report to the organization's top managers and board of directors

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Definitions:

Materials Quantity Variance

The difference between the actual quantity of materials used in production and the expected (or standard) quantity, measured in financial terms.

Direct Materials

These are the raw materials that are directly incorporated into a finished product.

Standard Cost Card

A document that lists the standard costs associated with producing a single unit of a product, including materials, labor, and overhead.

Fixed Manufacturing Overhead

Expenses related to production that remain constant regardless of output quantity, including lease payments, employee wages, and insurance premiums.