In the Annual Audit of the Financial Statements of a Company

question 224

Multiple Choice

In the annual audit of the financial statements of a company with high inherent risk and a very strong control system, the external auditor may be able to allow detection risk to rise because.

• A) Audit risk has been reduced.
• B) Control risk has been assessed at a lower level.
• C) The company's operations are very susceptible to misstatements.
• D) Whenever inherent risk is high, control risk is disregarded.

---

Definitions:

Severe Panic Attack

A sudden onset of intense fear or discomfort, often characterized by symptoms such as rapid heartbeat, sweating, and feelings of doom.

Generalized Dissociative Amnesia

A psychological condition in which a person cannot recall important personal information, not due to ordinary forgetfulness but often triggered by trauma or stress.

Psychomotor Retardation

A slowing-down of thought and a reduction of physical movements in an individual, often an indicator of major depression or other psychiatric disorders.

Obsessive-compulsive Disorder

A mental health disorder characterized by uncontrollable, recurring thoughts (obsessions) and behaviors (compulsions) that the individual feels the urge to repeat.