When Planning an Audit, the Auditor's Assessed Level of Control

question 111

Multiple Choice

When planning an audit, the auditor's assessed level of control risk is:

• A) calculated by using the formulas provided in ASA 315.
• B) calculated by using the audit risk model.
• C) an economic issue, trading off the costs of testing controls against the cost of testing balances.
• D) determined by using actuarial tables.

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Definitions:

Highest Attainable

Refers to the best or most favorable outcome or state that can be achieved within given constraints.

Total Utility

The overall satisfaction or fulfillment a consumer receives from consuming a given quantity of goods and services.

Marginal Utility

This refers to the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Seventh Unit

Refers to the specific instance or item in a sequence or set, used here as a way to denote its particular position.