Which of the Following Statements Is True Regarding the Risk

question 985

Multiple Choice

Which of the following statements is true regarding the risk assessment component of internal control?

• A) An auditor evaluates an entity's risk assessment because it is a component of overall audit risk in a financial statement audit.
• B) An auditor's evaluation of an entity's risk assessment may not be applicable to the audit of every entity.
• C) An auditor evaluates an entity's risk assessment to understand how management addresses risks relevant to financial reporting.
• D) An auditor need not consider an entity's risk assessment because he or she is primarily concerned with audit risk in a financial statement audit.

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Definitions:

Nominal Group Technique

A structured decision-making process where individuals rank ideas or solutions, after which group discussions and prioritizations lead to a final decision.

Storyboarding Teams

Groups dedicated to creating storyboards, which are visual representations of ideas or projects, often used in film, animation, and business planning.

Creative Writing

The art of crafting original compositions in various genres, emphasizing narrative craft, character development, and expression.

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from everyone in the group to solve problems or generate ideas.