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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
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Postaudits of capital projects are useful because

  1. a. they are not very costly.
  2. b. they have no significant limitations.
  3. c. the assumptions underlying the original analyses are often invalidated by changes the actual working environment.
  4. d. they help to ensure that resources are used wisely.
  5. e. All of these.

To determine

Identify the characteristic of a post audit.

Explanation

Postaudit:

The comparison analysis of actual cost and benefits of a project with the estimated costs and benefits of a project is known as postaudit.

d.

The postaudit analysis of capital projects ensures that the resources are used wisely. Therefore, option d is the correct option.

a.

The cost of a post audit analysis is not related to the usefulness of it...

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