Control Risk Has Been Assessed at 100% for Your Client

question 50

Multiple Choice

Control risk has been assessed at 100% for your client.What audit approach will you follow?

• A)a combined approach
• B)a substantive approach
• C)reliance on analytical review and tests of controls
• D)reliance on tests of controls and tests of details

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Definitions:

Cost Method

An accounting technique used to value investments, where the investment is recorded at purchase cost without recognizing subsequent changes in market value.

Consolidated Income Statement

A financial statement that aggregates the financial performance of a company and its subsidiaries.

Sales Revenue

The total amount of money earned from goods and services sold before any expenses are subtracted.

Goodwill

An intangible asset that arises when a company acquires another business for a price higher than the fair value of its net identifiable assets and liabilities.