An Auditor Should Assess a Client's Business Risks

question 18

Multiple Choice

An auditor should assess a client's business risks:

• A)Early in the engagement, based on discussion with management.
• B)At the end of the engagement after all evidence has been assembled.
• C)As part of the year end evidence gathering.
• D)Only if the client requests the auditor to do so in the engagement letter.

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Definitions:

Sample Size

The number of observations or individuals in a subset of a population selected for a particular study.

Measurement Errors

Discrepancies between the observed values and the true values, which can arise from various sources in data collection.

Reliable

Reliable refers to the consistency of a measure or process over time. In research, it means that the results of a study or the performance of an instrument are consistent and can be replicated under similar conditions.

Test-Retest

A method of measuring the reliability of a test by administering the same test to the same subjects at two points in time and comparing the results.