What Is the First Stage in Audit Risk Assessment

question 143

Multiple Choice

What is the first stage in audit risk assessment?

• A)Identification of accounts and related assertions most at risk of material misstatement, referred to as inherent risk
• B)Performance of audit procedures to identify transactions and accounts where the risk of material misstatement is lowest
• C)Test the existence assertion of recorded inventory
• D)Determination of the effectiveness of the client's system of internal controls

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Definitions:

Mercury

A heavy, silvery d-block element that is liquid at room temperature and used in various instruments, with significant environmental and health impacts.

Second Law

In thermodynamics, it states that the total entropy of an isolated system can never decrease over time, and is often associated with the concept of energy degradation.

Thermodynamics

The branch of physics that deals with the relationships between heat and other forms of energy, and how these affect matter, encompassing laws that describe energy conservation and entropy.

Energy Conversion

The process of transforming energy from one form into another, such as converting kinetic energy into electrical energy.