Inherent Risk and Control Risk Differ from Detection Risk in That

question 53

Multiple Choice

Inherent risk and control risk differ from detection risk in that inherent risk and control risk are:

• A)elements of audit risk whereas detection risk is not.
• B)changed at the auditor's discretion whereas detection risk is not.
• C)considered at the individual account-balance level whereas detection risk is not.
• D)functions of the client and its environment whereas detection risk is not.

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Definitions:

Batch

A grouping of a number of items processed or produced together as a single lot.

Operating Characteristics Curve

A graphical representation that shows the relationship between the capability of a process and its performance with respect to different criteria.

Acceptance Sampling

A statistical quality control method that involves inspecting a random sample of items from a lot to determine if the entire lot should be accepted or rejected.