The Assessment of Inherent Risk Requires Consideration of Matters That

question 38

Multiple Choice

The assessment of inherent risk requires consideration of matters that have a pervasive effect on assertions for all or many accounts and matters that may pertain only to assertions for specific accounts. Which of the following is an example of a "pervasive effects" matter?

• A) complexity of calculations.
• B) management turnover, reputation, and accounting skills.
• C) susceptibility to misappropriation.
• D) sensitivity of operating results to economic factors.
• E) difficult-to-audit accounts or transactions.

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Definitions:

Freshwater Organism

A living entity that inhabits water bodies with low salt content, such as lakes, rivers, and ponds.

Semipermeable Membrane

A membrane that allows the passage of certain small molecules or ions but blocks others.

Concentration Gradient

A variation in the concentration of a substance across a distance, often leading to the diffusion of substances from an area of higher concentration to an area of lower concentration.

Diffusion

Spontaneous spreading of molecules or atoms through a fluid or gas.