If Acceptable Audit Risk Is Increased,what Happens to Detection Risk

question 37

Multiple Choice

If acceptable audit risk is increased,what happens to detection risk?

• A)It stays the same.
• B)It increases.
• C)It changes based upon the audit procedures conducted.
• D)It decreases.

---

Definitions:

Company Cost

The total expenditure incurred by a company in the process of producing or selling goods and services.

Risk-Adjusted Rate

A financial metric that adjusts returns on investments by taking into account the level of risk involved, aiming to provide a more accurate comparison across different investments.

Risk-Free Asset

An investment that provides a guaranteed return with no risk of financial loss.

Stock Market

A marketplace where buyers and sellers trade shares of publicly held companies, reflecting the economic health and investor sentiment toward those companies.