Which of the Following Statements Is Correct Regarding the Assessment

question 252

Multiple Choice

Which of the following statements is correct regarding the assessment of risk in the annual audit planning process? 1. Activities requested by management should be considered higher risk than those requested by the audit committee. 2. Activities with lower budgets can be as high risk as those with higher budgets. 3. The potential financial or adverse exposure should always be considered in the assessment of risk.

• A) 1 only
• B) 2 only
• C) 3 only
• D) 2 and 3 only

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Definitions:

Strengths and Weaknesses

Refers to the positive and negative attributes of an individual's personal qualities or aspects of a thing or concept.

Cognitive Flexibility

The mental ability to switch between thinking about two different concepts or to think about multiple concepts simultaneously.

Bilingual

The ability to communicate fluently in two different languages.

Socioeconomic Status

A collective term for a person's social and economic position relative to others, based on income, education, and occupation.