The Susceptibility of an Assertion to a Material Misstatement, Assuming

question 22

Multiple Choice

The susceptibility of an assertion to a material misstatement, assuming that there are no controls, is:

• A) audit risk.
• B) control risk.
• C) analytical procedures risk.
• D) inherent risk.
• E) tests of details risk.

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Definitions:

Sales

The total revenue generated from goods or services sold by a company during a specific period.

Contribution Margin Ratio

The ratio of contribution margin to sales revenue, indicating the percentage of each sales dollar available to cover fixed costs and generate profit.

Break-even Point

The level of sales at which total revenues equal total costs, resulting in no profit or loss.

Net Loss

The amount by which total expenses exceed total revenues in a given period, indicating that a company spent more than it earned.