Because Control Risk and Inherent Risk Vary from Cycle to Cycle

question 78

Multiple Choice

Because control risk and inherent risk vary from cycle to cycle, account to account or objective to objective:

• A) detection risk and required audit evidence will also vary.
• B) detection risk will vary, but audit evidence will remain constant.
• C) detection risk will remain constant, but audit evidence will vary.
• D) acceptable audit risk must remain a constant.

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Definitions:

Service Industries

Sectors of the economy that provide intangible products or services such as healthcare, banking, and education.

Manufacturing Industries

Manufacturing industries involve the production of goods in large quantities using raw materials and machines, contributing significantly to economic development.

Collective Bargaining Agreements

Legal contracts between employers and a group of employees aimed at establishing wages, working conditions, benefits, and other aspects of workers' compensation and rights for a specified period.

Fringe Benefits

Additional benefits supplementing an employee's salary, such as health insurance, pensions, and paid vacations.