Engagement planning

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    Isaac Badu
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    I dont understand the answer to question CIA 596 1.39.
    The auditor’s concern is that some overheads charged were not appropriate thus wanted to find out if appropriate overheads were charged to jobs. THerefore why is answer D not the best but the least

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    Brian Hock
    HOCK international

    We need to be testing if the items that were charged to overhead were actually supposed to have been charged to overhead. So, we would want our population to be the amounts that are in overhead. By looking at contractor payments, we will be testing things that may not be in overhead at all. So, this is a test that would be more effective to test if there are amounts that were not charged to overhead, but should have been charged to overhead. But, that is not what we are concerned about in this question.

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