A Major Limitation in the Application of the Audit Risk

question 22

Multiple Choice

A major limitation in the application of the audit risk model is:

• A) the difficulty in understanding the effect on other factors in the model when one factor is changed.
• B) the difficulty in defining the terms of the model.
• C) the difficulty in measuring the components of the model.
• D) the failure of the Auditing and Assurance Standards Board to accept it and incorporate it into the standards.

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Definitions:

Executive Agreements

International agreements entered into by the executive branch of the US government without Senate approval, unlike treaties.

Foreign Policy

A government's strategy in dealing with other nations, encompassing diplomacy, military engagement, and economic relations.

Senate Approval

The formal endorsement or consent given by the Senate, which is one of the two chambers in the bicameral legislature of many countries, including the United States, for various governmental actions and appointments.

Punishment

The imposition of a penalty as retribution for an offense, with the aim of deterring future offenses and ensuring justice.