If During Risk Assessment Auditors Have Identified Risks of Material

question 104

Multiple Choice

If during risk assessment auditors have identified risks of material misstatement due to fraud, _______.

• A)they may consider not changing the timing of audit procedures
• B)they may consider changing the timing of audit procedures
• C)the auditors should confront the employee(s) in question
• D)the auditors should immediately report this to the SEC

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Definitions:

Equity Multiplier

The equity multiplier is a financial ratio that measures the degree of a company's financing through debt compared to its owned equity, indicating leverage level.

Return on Assets

A financial ratio indicating the profitability of a company relative to its total assets.

Costs of Goods Sold

Costs directly related to the manufacture of products sold by a company.

Accounts Receivable

Outstanding payments from debtors to a company for goods or services already utilized or delivered but not paid for.