A PA Recently Finished the Audit of a Family-Owned Business

question 11

Multiple Choice

A PA recently finished the audit of a family-owned business.Now she is working on a large client with about 50 times the assets and 30 times total revenue.For the larger client,the PA will likely have

• A)no changes to the audit risk model.
• B)higher control risk.
• C)higher acceptable audit risk.
• D)lower acceptable audit risk.

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Definitions:

Specific Brand

A unique identification or name for a particular product that differentiates it from others within the same category.

Price Elasticity of Supply

A measure of how much the quantity supplied of a good responds to a change in the price of that good, with elasticity differing across products.

Linear Demand Curve

A graphical representation of demand that shows a direct, constant relationship between price and quantity demanded.

Total Revenue

Total Revenue is the total income generated by a firm from selling its goods or services, calculated as the unit price multiplied by the quantity sold.