If from Last Year to the Current Year's Audit,inherent Risk

question 13

Multiple Choice

If from last year to the current year's audit,inherent risk has stayed constant but control risk is higher (it is more likely that controls do not detect material errors) ,what is the likely effect on detection risk?

• A)Detection risk will increase.
• B)Detection risk will decrease.
• C)Detection risk will stay the same.
• D)Detection risk will need less documentation.

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Definitions:

Would-Be Suppliers

Potential vendors or suppliers that are interested in providing goods or services to a company.

Competition

The alternative firms that could provide a product to satisfy a specific market’s needs.

Organizational Markets

Markets that involve the sale of goods or services to other businesses, government bodies, or institutions, rather than to individual consumers.

Examples

Specific instances or cases that are used to illustrate a principle, method, or situation.