When Classifying Risks as Being Significant, Consideration Is Given to Whether

question 12

Multiple Choice

When classifying risks as being significant, consideration is given to whether the risk involves all the following except involvement of _______.

• A)very simple transactions
• B)fraud
• C)significant third parties
• D)significant subjectivity in measurement

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Definitions:

Variable Cost

Costs that change in proportion with the level of output or production activity.

Fixed Costs

Overheads such as rent, salaries, and insurance that do not fluctuate with the level of goods produced or sold.

Variable Costs

Charges that vary in relation to the volume of output or services provided by a firm.

Fixed Costs

Expenses that do not change regardless of the level of production or business activity, such as rent, salaries, and insurance.