The Existence of Audit Risk Is Recognized by the Statement

question 38

Multiple Choice

The existence of audit risk is recognized by the statement in the auditor's standard report that the:

• A)auditor is responsible for expressing an opinion on the financial statements, which are the responsibility of management.
• B)financial statements are presented fairly, in all material respects, in conformity with applicable financial reporting framework.
• C)audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
• D)auditor obtains reasonable assurance about whether the financial statements are free of material misstatement.

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Definitions:

Regulatory Force

External forces, often in the form of government laws, regulations, and policies, that can impact a business’s operations and its approach to the market.

Environmental Scanning

The process by which businesses monitor and analyze their external environment to identify opportunities and threats.

Technological Environmental Force

Influences in the business environment resulting from changes in technology, impacting how products are produced, marketed, and distributed.

Social Force

Factors arising from societal norms and cultural values that influence individuals' behaviors, attitudes, and interactions within a community.