Which of the Following Statements Is Correct Regarding Risk Analysis

question 288

Multiple Choice

Which of the following statements is correct regarding risk analysis?

• A) The extent to which management judgments are required in an area could serve as a risk factor in assisting the auditor in making a comparative risk analysis.
• B) The highest risk assessment should always be assigned to the area with the largest potential loss.
• C) The highest risk assessment should always be assigned to the area with the highest probability of occurrence.
• D) Risk analysis must be reduced to quantitative terms in order to provide meaningful comparisons across an organization.

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