Acceptable Audit Risk Is a Measure of

question 23

Multiple Choice

Acceptable audit risk is a measure of

• A)the auditor's assessment of the likelihood that a material misstatement might occur in the first place.
• B)the probability that the financial statements contain errors.
• C)how willing the auditor is to accept that the financial statements may be materially misstated after the audit is completed.
• D)the probability that errors in the financial statements that were not detected by the internal controls of the firm are not detected by the auditor.

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Definitions:

Motivated Forgetting

A psychological theory that suggests individuals may forget unwanted memories, either consciously or unconsciously, due to the memories being distressful or threatening.

Anxiety-Arousing Memories

Recollections of past events that trigger feelings of fear, worry, or apprehension.

Repression

In psychoanalytic theory, the basic defense mechanism that banishes from consciousness anxiety-arousing thoughts, feelings, and memories.

Long-Term Memory

The aspect of memory where information is stored for an extended period, ranging from hours to a lifetime.