Professional Documents
Culture Documents
2016
Essay Questions & Answer
CMA - PART 1
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B. Footnote disclosures and schedules specifically related to the balance sheet include
1) Investment securities
factoring with recourse, rights of ownership remain with the original owner of the
receivable and are not transferred to the factor. The receivable then remains on the original
owner's balance sheet.
period calculated as cost less estimated residual divided by the estimated asset life.
period calculated as the declining balance percentage divided by the estimated life times
the net book value of the asset at the beginning of the period. Estimated residual value is
ignored in the calculation. The net book value is cost less accumulated depreciation. Care
must be taken to depreciate the asset down to its estimated residual value but not below it.
4. How the owner can benefits from the information presented in cash
flow statement
The statement of cash flows should help the owner assess the entity’s ability to generate
positive future net cash flows (liquidity), its ability to meet obligations (solvency), and its
financial flexibility
1) The lease provides for the transfer of ownership of the leased property.
3) The lease term is 75% or more of the estimated economic life of the leased property.
4) The present value of the minimum lease payments is at least 90% of the fair value of the
leased property
- if the long-term lease does not meet any of the above criteria .
- In an operating lease, the lessor retains substantially all of the benefits and risks of
ownership. Such a lease is a regular rental agreement
-The lessee reports periodic rental expense for the amount of rent paid, but no leased asset
or liability is recognized
Advantage:
Disadvantage:
• it results in higher income taxes when inventory costs are consistently rising
7. Last In First Out (LIFO) in which we assume that the item sold to the customer is
the latest unit purchased by the seller (in other words, the newest item in inventory)
Advantage
Disadvantage
• The inventory valuation on the balance sheet could be many years out of date
8. Weighted Average,
in which we sum the costs paid for all the individual units of a given item in inventory and
divide by the number of units purchased to find the average cost for each unit.
Advantages
is an easy-to-use and understand method. It is relatively easily programmed when used for
perpetual inventory valuation. It provides little tax advantage when costs are consistently
rising or falling.
effects :
- Direct costs of issuing stock (underwriting, legal, accounting, tax, registration, etc.) must
not be recognized as an expense. Instead, they reduce the net proceeds received and
additional paid-in capital.
Benefits
1.Less coordination required between functional areas; everyone follows the bill of
materials.
4. More efficient inventory control; schedules to use up raw materials or build finished
goods.
5. Additional inventory on hand to cover orders should product be damaged or lost in transit
to a customer.
6. Quick response to new customer demand; can supply new customers from existing
inventory rather than building product after the order is received.
7. Better manufacturing process control; minimizes retooling and machine setup time.
Limitations
Definitions:
Benefits :
1- Reduction in the cost of carrying the inventory and reduces nonvalue adding activities.
2- Greater emphasis on improving quality by eliminating the causes of rework, scrap and
waste.
6- JIT increases inventory turnover (cost of sales ÷ average inventory) and decreases
inventory as a percentage of total assets.
Backflush costing is less costly to operate than most traditional costing systems.
Limitations
18. Explain the concept of outsourcing, and identify the benefits and
limitations of choosing this option.
Definition
Process of purchasing goods and services from outside vendors rather than producing the
same goods or providing the same services within the organization. For smaller business,
outsourcing may provide access to resources and expertise for capabilities they may not
have internally. For larger businesses, outsourcing can improve specific functions
Benefits
3. Benefits of outsourcing include reliable service, reduced costs, avoidance of the risk of
5. Can provide access to current technologies at reasonable cost without the risk of
obsolescence
6. Can reduce expenses by gaining capabilities without incurring overhead costs (for
example,
7. Can result in “giving knowledge away” and lead to competitors obtaining expertise, scale,
customers, etc.
Throughput costing, also called supervariable costing, is a costing method where the only
costs included in inventory are the costs of direct materials..
20. Define value chain analysis Value chain analysis - A continuous process of
gathering, evaluating, and communicating information. The basic intent of value chain
analysis is to help managers envision an organizations future and implement business
decisions to gain and sustain competitive advantage.
21. Identify the steps in value chain analysis
2) Identify the cost driver or cost drivers for each activity, and
3) Develop a competitive advantage by adding value to the customer or reducing the costs
of the activity.
22. Explain how value chain analysis is used to better understand a firm's
competitive advantage.
a. The purpose of a value chain analysis is to focus on the total value chain of each product
or service and to determine which selected part or parts support the firm's competitive
advantage and strategy. Theoretically, competitive advantage and competitive strategy
cannot be examined meaningfully at the organizational level as a whole or even at the
business unit level. Because a value chain separates the firm into distinct strategic
activities, organizations can use value chain analysis to determine where in the operations
from design to distribution and customer service customer value can be enhanced and
costs lowered
Define : An equivalent unit (EU ) is a measure of the amount of work done on partially
completed units expressed in terms of how many complete units could have been created
with the same amount of work
Benefit : It help the company for better estimation of the unfinished units (work in
process) to more realistic counting of the ending inventory
Absorption " FULL " Costing Variable " Direct " Costing
Limitation 1) The level of inventory affects 1) Variable costing does not provide
net income because fixed costs proper matching of costs and benefits.
are a component of product cost.
2) Since only variable manufacturing
2) The net income reported under costs are charged to the inventory in
the absorption method is less variable costing, this method requires
reliable (especially for use in separating all manufacturing costs into
performance their fixed and variable components.
is designed to allow
a firm to focus on
the overall costs for
a product or service
28. Identify and describe the benefits and limitations of each cost
accumulation system
Cost accumulation System Benefits Limitations
1. Job order costing is best 1. Employees are required
for businesses that do to keep track of all the direct
Job Order Costing custom work or service work labor hours used and all the
. materials used.
For example, a product that is designed quickly and carelessly, with little investment in
design costs, could have significantly higher marketing and service costs later in the life
cycle.
Managers are interested in the total cost, over the entire life cycle, not manufacturing costs
only.
In life-cycle budgeting, managers estimate the revenues and business function costs across
the entire value chain from a product’s initial R&D to its final customer service and support.
Life-cycle costing tracks and accumulates business function costs across the entire value
chain from a product’s initial R&D to its final customer service and support.
Life-cycle costing-Sometimes used on a strategic basis for cost planning and product
pricing. It is designed to allow a firm to focus on the overall costs for a product or service.
Poor early design could lead to much higher marketing costs, lower sales, and higher
service costs.
Upstream costs-Costs
Downstream costs
31. Michael E. Porter’s “The Five Forces Model,” and Explain Two
32. Define key performance indicators (KPIs), and discuss the importance
of these indicators in evaluating a firm.
Key performance indicators (KPls) are measures of factors critical to the success of the
organization. Each KPI requires a defined business process, clear objectives for the
process, quantitative or qualitative measurements for the objectives, and a plan for
identifying and correcting variances from plan.
Balanced scorecard-A process of compiling and organizing the key performance indicators
(KPIs) of an organization into four segments: a. financial, b. customer, c. internal business
process, and d. learning and growth. - Each KPI can be measured in a specific way so that
it can be managed appropriately
Financial measures - Cover the traditional financial ratios, such as return on equity,
sales growth, return on assets, earnings per share, and the like.
Customer satisfaction measures - Focusing on the customer is critical to
accomplishing goals as the customer drives all of a company's revenue. The primary
customer outcome measures include market share, acquisition, satisfaction, retention, and
profitability.
senior management support the program, even as high as the board of directors.
It is tied to the organization's strategy and goals, and the performance measures can be
quantified.
Each business unit and division should be involved in developing its own customized
scorecard.
It is organized according to the four perspectives, with each selected scorecard measure
on a line and classified within its perspective.
It identify tradeoffs that managers might make, for instance by reducing R&D spending to
achieve short-run financial goals, or making other tradeoffs that could hurt future financial
performance.
a firm have extensive enterprise resource planning6 systems to capture the required
information.
Define
- Sets overall objectives for an entity and guides the process of reaching those objectives. It
is the responsibility of upper management .
Purposes / Benefit
- guide the company in its efforts to achieve superior performance, competitive advantage,
and maximized shareholder value.
- setting overall organizational objectives and goals and drafting strategic plans. It is a long-
term process aimed at charting the future course of the organization.
- is the design and implementation of the specific steps and processes necessary to reach
the overall objectives.
Limitation
- The fact that planning based on predictions is not an exact science; due to a variety of
factors, plans may prove to be incorrect and fail
- devoid of fresh ideas and strategic thinking
Step 1 Defining/selecting the company’s Mission and addressing the key corporate goals.
Step 2 Analyzing the organization’s external factors & the internal operating environment .
Step 3 Formulating and selecting strategies (SWOT analysis) that, Based on the results of
the situational analysis, upper management develops a group of strategies describing how
the mission will be achieved.
38. Strategy, plans and budgets are interrelated and affect one another?
Strategic analysis is the basis for both long-term and short-term planning.
Budgets provide feedback to managers about the likely effects of their strategic plans.
Managers use this feedback to revise their strategic plans.
Strategy is the organization's plan to match its strengths with the opportunities in the
marketplace to accomplish its desired goals over the short and long term.
Without a budget, the organization would be operating in a reactive manner, rather than in a
Proactive manner.
2- Budgets promote coordination and communication among organization units
and activities
budgets requires departmental managers to make plans in conjunction with the plans of
other interdependent departments, If the firm does not have an overall budget, each
department tends to pursue its own objectives without regard to what is good for the firm as
a whole..
3- As a control tool
3) A manager is less apt to spend money for things that are not needed if (s) he knows that
all costs will be compared with the budget.
7) For the budgetary process to serve effectively as a control function, it must be integrated
with the accounting system and the organizational structure
4- Provide motivation for managers and employees to achieve the company's plans
b) A manager who is asked to prepare a budget for his/her department will work hard to
stay within the budget.
4) Employees are more apt to have a positive feeling toward a budget if some degree of
flexibility is allowed
A budget helps management to allocate resources efficiently and to ensure that subunit
Goals are congruent with those of other subunits and of the organization
Identifying cash position, whether company need to borrow, as it shows the company
projected sales, costs and profits, used to decide whether the budget activities will result in
an acceptable level of income, also other strategic objective can be observed such as
target gross margin percentage
41. Explain the role of the sales budget in the development of an annual
profit plan
A sales budget is a cornerstone of budget preparation because a firm can complete the
plan for other activities only after it identifies the expected sales level, without an accurate
sales forecast, all other budget elements will be inaccurate since they are driven by
estimated demand
42. Explain the relationship between the sales budget and the
production budget
Once the desired level of sales is determined (from the sales budget), the production
budget is created to satisfy the expected demand, plus-or minus desired changes in
inventory levels
43. How can sales budget effect in operating income Budgeted income
statement based on the sales levels which incorporated in the sales budget and based on
the direct material, direct labour, manufacturing overhead budgets which also prepared
after the sales budget
44. Mention and explain four factors to consider while preparing a sales
budget
2) Competitors' actions
3) Rising costs
4) pricing policies
- Types of business.
- Organizational structure.
- Complexity of operations
- Management philosophy
47. The BCG (Boston Consulting Group) Growth Share Matrix looks at the
company's products or services as one of the following: stars, cash cows, dogs, or question
marks. Stars are products or services with high growth rates and high cash generation
capabilities. Cash cows have high cash generation capabilities but low growth rates. Dogs
have low cash generation capabilities and low growth rates. Question marks have high
growth rates but low cash generation capabilities.
48. MASTER BUDGET / Annual Budget
Define
Encompasses the organization’s operating and financial plans for a specified period
(Ordinarily a year or single operating cycle. Is made up of several deferent budgets, and
some budgets can't be developed until other budgets have already been completed.
Purpose
Appropriate Use
appropriate for most industries but are particularly useful in manufacturing settings that
require coordination of financial and operating budgets.
Timeframe
Benefits
Master budgets are relatively easy to prepare and are the most commonly developed
budget system.
Limitations
Master budget amounts are confined to one year at a single level of activity.
Define
used for creating a budget for specific projects or programs rather than for an entire
company, such as the design of a new airliner or the building of a single ship
Appropriate use
Project budgets are appropriate for specific tasks (e.g., construction of building, infrequent
events , or groups of projects such as new product development, marketing, and
refinement.
Timeframe
The time frame for a project budget is simply the duration of the project, but a multi-year
Benefits
Project budgets allow for a focused look at a particular project's resource requirements and
timing & the ability to contain all of a project’s costs so that its individual impact can be
easily measured.
Limitations
If the budget process improperly done, project budgets may not afford a comprehensive
look at the manner in which the project impacts the organization.
Define
Purpose
Appropriate use ABB is most appropriate in businesses that have complexity in their
number of products, number of departments, or other factors such as setups.
Timeframe Activity based budgeting is generally applied to annual time periods or less.
51. Zero Based Budgeting
Define
starts each new budgeting cycle from scratch as though the budgets are prepared for the
first time; ZBB is a budget and planning process in which each manager must justify his/her
department’s entire budget every budget cycle.
Purpose
- Many budget systems are referred to as incremental budgets because they assume that
previous budgets represent required levels of effort and need only be adjusted for
assumption and require that manager begin the budget process from zero.
- Thus, managers must conduct in-depth reviews and analyses of all budget items and of
that have outlived their usefulness or have been a waste of resources. A tight, efficient
Benefits
Limitations
1.it can require a nearly impossible amount of work to review all of a company's
Purpose
Continuous (rolling or perpetual) budgets add a new budget month - rolls forward- (or
quarter) as each current month (or quarter) expires> According to this model, budgeting
becomes a perpetual process and long-range planning is performed continually rather than
annually.
Appropriate Use
Continuous (rolling) budgets are most effective in dynamic environments where constant re-
evaluation of products and activities are required by the market place or where results of
activities are critical to operations
Timeframe
Although a continuous (rolling) budget contemplates a year of activity, it usually does not
Coincide with the organization's fiscal period because it adds either a month or a quarter to
the budget as each month or quarter is completed.
Benefits
Limitations
Appropriate Use Flexible budgets are most appropriate for a firm facing a significant
level of uncertainty in unit sales volumes for next periods.
Benefits
- can be displayed on any number of volume levels within the relevant range.
- Flexible budgets offer managers a more realistic comparison of budget and actual
revenue and cost items under their control.
Limitations
- Flexible budgets are highly dependent on the accurate identification of fixed and variable
costs and the determination of the relevant range.
a) Flexible budget considers only variable costs but a master budget considers all costs.
b) Flexible budget allows management latitude in meeting goals whereas a master budget
is based upon a fixed standard.
c) Master budget is for an entire production facility but a flexible budget is applicable to
single departments only.
d) Master budget is based on one specific level of production and a flexible budget can be
prepared for any production level within a relevant range.
3) People who are charged with carrying out the budget need to feel ownership of the
budget.
4) The time period for a budget should reflect the purpose of the budget
2. It has well-defined goals consistent with the strategic plan and the mission from which
the plan we derived.
• Specific
• Measurable
• Achievable
• Realistic
• Timely
57. Identify the external factors that should be analysed during the
strategic planning process
Three environments should be examined, and the three environments are interrelated and shaping
the organizational strategy:
1. The industry in which the company operates,
2. The country or the national environment in which the company operates as well as the
international environment,
- Economic, demographic, political, legal and regulatory factors, social, cultural, and technical
changes.
- Globalization trends, emerging markets, and nongovernment organizations (e.g., United Nations,
World Bank, etc.).
58. Identify the internal factors that should be analyzed during the
strategic planning process
• Strengths are those things that would enhance the organization's competitive position
and profitability;
• Weaknesses are those that detract from its competitive position and profitability.
• resources (its financial, physical, human, technological, and organizational assets) and
• capabilities (its skills at coordinating resources and putting them to productive use).
Therefore, Internal analysis focuses on reviewing the:
costs for direct materials; direct labour and manufacturing overhead that are
predetermined or estimated, as they would apply under specified conditions
Goal congruence it refers to the aligning of goals of the Individual managers with the goals
of the organization as a whole.
1
The best way to avoid the problems of budgetary slack is to use the budget as a planning
and control tool, but not for managerial performance evaluation. Or, if the company does
use the budget to Evaluate managers, it could reward them based on the accuracy of the
2
forecasts A firm may decrease slack by emphasizing the consideration of all variables,
holding in-depth reviews During budget development, and allowing for flexibility in making
additional budget changes
- are standard costs under optimal conditions. They are based on the work of the most
skilled workers with no allowance for waste, spoilage, machine breakdowns, or other
downtime.
downtime.
- helps the organization utilize and maximize its strengths, minimize and correct its
weaknesses, exploit opportunities, and avoid or minimize risks.
Regression analysis is a quantitative method and as such, it is objective. A given data set
generates a specific result. That result can be used to draw conclusions and make
forecasts.
is an important tool for use in budgeting and cost accounting. In budgeting, it is virtually
the only way to compute fixed and variable portions of costs that contain both fixed and
variable components (mixed costs).
The shortcomings or limitations of regression analysis are:
To use regression analysis, historical data is required for the variable that we are
forecasting or for the variables that are causal to this variable. If historical data is not
available, regression analysis cannot be used.
Even when historical data is available, if there has been a significant change in the
conditions surrounding that data, its use is questionable for predicting the future.
Analysis are valid only for the range of data in the sample
If the choice of independent variable (s) is inappropriate, the results can be misleading.
Life-Cycle costing – in calculating the cost of a contract, learning curve analysis can
ensure that the cost estimates are accurate over the life of the contract, leading to better
bidding.
Development of production plans and labor requirements – production and labor Budgets
should be adjusted to accommodate learning curves
Third, a carefully estimated learning curve might be unreliable because the observed
change in productivity in the data used to fit the model was actually associated with factors
other than learning.
67. Benefits and Limitations of expected value
Expected value analysis forces managers to think of all the possibilities that could happen
with each decision, and to evaluate decisions in a more organized manner.
It depends on repetitive trials, but in reality, most business decisions involve only one trial.
The breakdown of variances into flexible budget variances and sales budget variances can
allow a firm to make business decisions based on these variances. Management by
exception is a method of focusing management attention on only significant variances from
the budget. Significant variances are the exceptions that require more attention than other
areas.
Purchases Price
1) unfavourable materials price variance
- The purchasing function may be responsible under the assumption that it bought materials
that cost too much.
- The prices in the industry have risen, and standard costs should be updated.
2) favourable materials price variance
- that the purchasing function performed well by finding a lower-cost source for the
materials. But prices may have fallen, the purchasing function simply bought at the market
price, and standard costs should be updated.
- Another possibility is that the lower price may be attributable to lower-quality materials.
76. Identify the methods for determining transfer prices and list and
explain the advantages and disadvantages of each method
Market price: A true arm's-length model because it sets the price for a good or service at
going market prices
• Keeps business units autonomous, forces the selling unit to be competitive with external
suppliers, and is preferred by tax authorities
Variable cost: Sets transfer prices at the unit's variable cost, or the actual cost to
produce the good or service less all fixed costs
• Is advantageous for selling units that have excess capacity because company wants to
encourage internal purchases
• Disadvantages of this method that it is not viewed favorably by tax authorities because it
lowers the profits
Full cost: Starts with the seller's variable cost for the item and then allocates fixed costs
to the price
This method may create less incentive for the buyer to purchase internally if the market
price is less and may create less incentive for the seller to reduce costs
Negotiated price: sets the transfer price through negotiation between the buyer and the
seller This method can make both buying and selling units less autonomous
77. If the company operates outside the country how this will affect its
performance measure
Companies in multinational may using low price in transfer price between company
branches to avoid high tax on profit in high tax on profit countries
78. Transfer pricing based on standard full cost or actual full cost which is
better for the company
Using standard full cost won’t transfer inefficiencies from selling to buying division but under
actual full cost inefficiencies are passed from selling to buying division
Advantage
• Standard full cost: No inefficiency passed to buying division and appropriate for longterm
decisions
• Actual full cost: Appropriate for Long term decisions
Disadvantage (both)
- Not appropriate for short term decisions
- demotivate selling division managers if they are at full capacity with competitive market
- demotivate selling division managers if they are evaluated at profit centers
- some managers would see it as a restrictions’ on their autonomy
79. Identify and describe the major internal control provisions of the
Foreign Corrupt Practices Act.
The FCPA mandated that public companies make and keep books, records, and accounts
that, in reasonable detail, accurately and fairly reflect the transactions and disposition of the
assets of the company. In addition, the company must devise and maintain a system of
internal accounting controls sufficient to provide reasonable
2) Accounting provisions
2) Illegal acts
Note; The internal auditor should evaluate fraud indicators and deciding whether any
additional action is necessary or whether investigation should be recommended.
b. Operational audit A nonfinancial audit that is intended to evaluate the effectiveness and
efficiency of the organization or one of its divisions, departments, or processes.
Safeguarding of assets
Efficiency of operations
83. Define the internal audit function and identify its functions AND
SCOPE
The primary purpose of an internal audit is to appraise the design of, effectiveness of, and
adherence to internal control policies and procedures and to assess the firm’s quality of
performance. The internal auditor ensures that any risk to the business is addressed and
verifies that the firm‟s goals and objectives are met efficiently and effectively.
The scope of internal auditing is broad and may include; the efficacy of operations; the
reliability of financial reporting; deterring, detecting, and investigating fraud; safeguarding
assets; and compliance with laws and regulations.
A hot site is a backup facility that has a computer system similar to the one used regularly.
The hot site must be fully operational and immediately available, with all necessary
telecommunications hook-ups for online processing. A hot site also has current, live data
that is replicated to it from the live site, either by data communications or by on-site storage
of backup media.
A cold site is a facility where space, electric power, and heating and air conditioning are
available and processing equipment can be installed, though the equipment and the
necessary telecommunications are not immediately available. If an organization uses a cold
site, its disaster
5) Declare dividends.
Section 201—Prohibits external auditors from performing non audit services, such as
bookkeeping, internal audit functions, consulting, systems design, and so on.
Section 203—Requires audit partners to rotate at least every five years from an audit they
have been responsible for.
Section 302—Requires a public company’s principal officers (e.g. the CEO and CFO) to
certify as to the accuracy and completeness (include ing full disclosures) of the company’s
financial report(s) and, thus, the integrity of the report(s).
Section 404—Each annual report must contain an assessment of internal controls and
state management’s responsibility for establishing and maintaining an adequate internal
control structure.
For example, if the internal audit activity were to report to a member of senior management,
the internal auditors might be reluctant to question anything potentially inappropriate that
they might discover relating to activities of the senior manager supervising their activity,
because doing so could threaten the auditors’ job security. For that reason, the internal
audit activity reports functionally to the board of directors and not to any officer of the
corporation.
Independence also means that the chief audit executive must have unrestricted access to
any member of senior management as well as to the members of the board of directors.
When an internal auditor wants to speak with the CEO, the CEO must be available.
Internal auditors individually must be objective. That means they must have an impartial,
unbiased attitude and must avoid any conflict of interest. A conflict of interest is a
competing interest that could make it difficult for the internal auditor to fulfill his or her duties
properly. For example, if an internal auditor has been responsible for a particular area of
operations within the past year, that auditor may not audit that area because of the potential
conflict of interest (the auditor could be auditing his or her own work). Furthermore, if an
internal auditor is assigned to audit a department where his or her best friend works, that
could also represent a conflict of interest.
In the event of a conflict of interest, the auditor should let the chief audit executive know
about the conflict of interest, and probably another auditor should be assigned to that audit
engagement.
Ex. fences, locked doors, security guards, two people to open the mail, sound personal
practices, documentation of policies and procedures and a separation of duties policy.
b. Directive control (special type of corrective). The control that designed to encourage a
desirable event to occur ex. requiring all members of the internal audit department to be
CIAs.
Essentially, personnel policies and other directive controls are a special form of preventive
controls in that errors are prevented through the proper selection and training of employees.
c. Detective control is one that calls attention to an error that has already entered the
system before the error causes a negative outcome. An example is a petty cash count,
detective controls serves as a backup of the preventive controls.
e. Compensatory control
2) Risk assessment is the entity's identification and analysis of relevant risks as a basis for
their management.
a) Relevant risks include events and circumstances that may adversely affect an entity's
ability to initiate, authorize, record, process, and report financial data consistent with
financial statement assertions.
3) Control activities are the policies and procedures that help ensure that engagement
directives are carried out.
4) Information and communication systems support the identification, capture, and
exchange of information in a form and time frame that enable people to carry out their
responsibilities.
5) Monitoring is a process that assesses the quality of internal control performance over
time. It can be done by separate evaluation or on going activities. Ongoing monitoring are
procedures built into the normal recurring activities of the entity and include regular
management and supervisory
2-Commitment to competence
6-Organizational structure
organization that is serious about internal control will design its lines of reporting and
authority such that incompatible duties are not combined in the same job function and
independent checks on performance are facilitated
The independent auditor is nominated by the Audit Committee, and the independent
auditor’s appointment is ratified by shareholders at the annual meeting of shareholders
4-production cycle
3· Allocate resources, set frequencies, select subjects, determine scopes of work, and
apply the techniques required to accomplish audit objectives. · Obtain the necessary
assistance of personnel in units of the organization
Where they perform audits, as well as other specialized services from within or outside the
organization
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