In an Audit, the Purpose of Risk Assessment Is to ________

question 67

Multiple Choice

In an audit, the purpose of risk assessment is to ________.

• A)form an ultimate opinion on the financial statements based on management's directives
• B)assess the combined inherent, control and detection risks to evaluate the likelihood that material misstatements could occur in the financial statements.
• C)audit the system of internal control only
• D)ultimately ensure that the internal audit function is performing properly

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Definitions:

Bilateral Trade Agreement

An agreement between two countries that lowers tariffs and trade barriers on most goods and services traded between them.

Exports

Goods or services produced in one country and sold to buyers in another, contributing to a country's economy by bringing in revenues.

Mercantilism

An economic theory and practice dominant in Europe from the 16th to the 18th century, focusing on accumulating wealth through trade and having a positive balance of trade.

Higher Rates

Increased levels of a particular measure, often referring to interest, inflation, or pricing rates compared to a standard or previous period.