The Auditor's Assessment of Control Risk Is a Critical One

question 105

Multiple Choice

The auditor's assessment of control risk is a critical one because it affects the auditor's decisions about:

• A) substantive tests of transactions.
• B) tests of details of balances.
• C) tests of controls.
• D) all of the above

---

Definitions:

Covariance

A measure of how two securities move together, used to assess the degree to which they co-vary.

Assets GM and GE

Refers to the tangible and intangible items owned by General Motors (GM) and General Electric (GE) that are used in their operations to generate revenue.

Beta

A measure of the volatility, or systematic risk, of a security or portfolio in comparison to the market as a whole.

Evolution

The gradual development of something, often used in the context of the biological process by which organisms change over generations.