When Inherent Risk Is Assessed as Higher (I

question 44

Multiple Choice

When inherent risk is assessed as higher (i.e.more material errors are likely to exist) and control risk is assessed the same from one year to the next,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.

---

Definitions:

Functional Strategy

A specific, focused plan aimed at achieving objectives and improving performance within a particular department or function of an organization.

Functional Strategy

A specific, detailed plan tailored to a department or unit within an organization, aimed at achieving the broader corporate strategies and goals.

Specific Area of Operations

Refers to a designated segment within an organization focused on a particular set of tasks, goals, or objectives, often with its specified strategies and responsibilities.

Strategic Business Unit

A semi-autonomous division within a larger organization, responsible for its own strategy, resources, and performance, focusing on specific market segments.