Once Risks Are Identified, Auditors Assess the Risk of Material

question 53

Short Answer

Once risks are identified, auditors assess the risk of material misstatement at the _______ level for these significant classes of transactions and account balances.
A.relevant assertion level | account | financial statement | disclosure

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Definitions:

Selling Price

The amount of money charged for a product or service.

Net Operating Income

An accounting term that represents the revenue minus the cost of goods sold and operating expenses, excluding taxes and interest.

Degree Of Operating Leverage

A measure, at a given level of sales, of how a percentage change in sales will affect profits. The degree of operating leverage is computed by dividing contribution margin by net operating income.

Variable Expenses

Costs that vary in direct proportion to changes in an activity level or volume, such as sales commissions.