If the Auditor's Assessment of Audit Risk Is Low (E

question 77

Multiple Choice

If the auditor's assessment of audit risk is low (e.g., 1% rather than 5%) , what is the effect on the amount of direct testing performed by the auditor?

• A) Increase in direct testing.
• B) Decrease in direct testing
• C) No change in direct testing.
• D) Direct testing is not needed.

Comprehend how firms can maintain competitive advantage through cost leadership, differentiation, and innovation.

Understand the impact of supplier and buyer power on a firm’s strategic decisions.

Grasp the concept of barriers to entry and how they affect the competition in an industry.

Understand how market structure influences firm rivalry and profitability.

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Definitions:

Human Resource Forecasting

The process of predicting an organization's future human resource needs based on current data and trends to ensure it meets its objectives with the right number of employees having the necessary skills.

Organizational Competencies

The combination of skills, knowledge, and behaviors that are critical for an organization to achieve its goals and be successful.

Core Capabilities

The essential skills, knowledge, and abilities that a company possesses, which give it a competitive advantage in its industry.

Competitive Advantage

The unique attributes or circumstances that allow a company to produce goods or services better or more cheaply than its competitors.