The specific audit objective "factory labor is correctly classified as direct and indirect labor" is derived from the:
A) existence or occurrence assertion.
B) completeness assertion.
C) rights and obligations assertion.
D) valuation or allocation assertion.
E) presentation or disclosure assertion.

Question

Quizplus · Accepted Answer

This objective relates to the valuation or allocation assertion because it concerns how labor costs are allocated between direct and indirect categories, affecting the accuracy of product costing and financial statements.

The Specific Audit Objective "Factory Labor Is Correctly Classified as Direct