The Ultimate Purpose of Assessing Control Risk Is to Contribute

question 600

Multiple Choice

The ultimate purpose of assessing control risk is to contribute to the auditor's evaluation of the risk that:

• A) Tests of controls may fail to identify procedures relevant to assertions.
• B) Material misstatements may exist in the financial statements.
• C) Specified controls requiring segregation of duties may be circumvented by collusion.
• D) Entity policies may be overridden by senior management.

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Definitions:

Interest Rate

It represents the cost of borrowing money or the reward for saving, crucial for personal finance and economic policy decisions.

Years

Units of time that represent a period approximately equal to 365 days, used to measure duration or age.

Economic Profits

The surplus remaining after subtracting both the explicit and implicit costs from total revenues.

Productive Land Resources

Refers to natural resources that can be used for production purposes, such as agriculture, mining, and forestry.