Which One of the Following Statements Regarding Inherent Risk Is

question 79

Multiple Choice

Which one of the following statements regarding inherent risk is correct?

• A) The inherent risk assigned in the audit risk model is dependent upon the strengths in client's internal control system.
• B) The inherent risk assigned in the audit risk model is unaffected by the auditor's experience with client's organisation.
• C) Most auditors set a high inherent risk in the first year of an audit and reduce it in subsequent years as they gain experience, even when there is inherent risk.
• D) Most auditors set a low inherent risk in the first year of an audit and increase it if experience shows that it was incorrect.

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