It Is Important for the Auditor to Obtain a Good

question 51

Multiple Choice

It is important for the auditor to obtain a good understanding of the client's industry to develop a client risk profile.If the auditor is looking at a client in the fashion clothing industry,a risk specific to the industry would be

• A)the high risk of poor governance and management oversight.
• B)the high risk of defective products.
• C)the high risk of obsolescence of their inventory.
• D)the volatility in the stock market with regards to common stock.

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Definitions:

Primary Data

Data that is collected firsthand by the researcher for a specific research purpose or project.

Tertiary Data

Information that has been collected and processed from secondary sources rather than obtained directly from original sources.

Secondary Data

Information that has been collected previously by someone else, used for research purposes other than the original intent.

Restaurant Industry

The sector of the economy that encompasses businesses focused on preparing and serving food and beverages to customers.