The Risk of Assessing Control Risk Too Low Can Lead

question 5

Multiple Choice

The risk of assessing control risk too low can lead to ________.

• A)the auditor performing more work than needed,thus wasting resources
• B)the auditor failing to do additional work that should be done
• C)poor choice of procedures
• D)expanding sample sizes required for statistical sampling of account balances

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Definitions:

Protection

Measures or strategies implemented to safeguard against financial loss, damage, or other adverse effects.

Front-end Ratio

A financial ratio that compares a person’s gross monthly income to his or her monthly housing costs.

Housing Expenses

Costs associated with owning or renting a living space, including mortgage or rent, utility bills, property taxes, and maintenance fees.

APR

The Annual Percentage Rate, which reflects the cost of borrowing on a yearly basis and includes interest and other charges.