While preforming an internal audit at a production plant, the auditor notices there are a significant number of end-of-the-year purchases that the auditor cannot explain. The auditor reviewed the previous year and found a similar situation. The auditor begins to think the plant is using a _____ budgeting method.
A) budgetary slack
B) cost plus
C) flexible
D) use-it-or-lose-it

Question

Quizplus · Accepted Answer

In the use-it-or-lose-it budgeting method, managers spend all their allocated funds in the budget period to avoid being granted less funds in subsequent budgeting periods.

While Preforming an Internal Audit at a Production Plant, the Auditor