The Probability That an Audit Team Will Give an Inappropriate

question 2

Multiple Choice

The probability that an audit team will give an inappropriate opinion on financial statements best describes:

• A)audit risk.
• B)inherent risk.
• C)control risk.
• D)detection risk.

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Definitions:

Unused Capacity

Refers to the available production or service facility space that is not currently being used to generate revenue or produce goods.

Sunk Cost

A cost that has already been incurred and cannot be recovered, which should not influence future business decisions.

Accumulated Depreciation

The total depreciation expense allocated for a tangible asset over its usage period, reducing its book value.

Replacement Equipment

Items purchased to replace older assets within a business, ensuring operational efficiency and continuity.