A Risk Components Matrix or Its Equivalent Is Necessary Whenever

question 18

Multiple Choice

A risk components matrix or its equivalent is necessary whenever the auditor uses:

• A) quantitative expressions for risk.
• B) nonqualitative expressions for risk.
• C) the risk model in planning an audit.
• D) a lower assessment of control risk or inherent risk.
• E) nonquantitative expressions for risk.

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Definitions:

Industry-specific

Pertains to aspects or characteristics unique to a particular industry or sector.

Lemons

A colloquial term in economic theory often referring to products of inferior quality sold because of asymmetric information between buyers and sellers.

Plums

A type of fruit belonging to the genus Prunus, known for its juicy and sweet flesh.

Distinguish

To recognize or point out the differences between two or more things or to identify as distinct.