The Risk of Assessing Control Risk Too High Is the Risk

question 14

Multiple Choice

The risk of assessing control risk too high is the risk that the evidence of compliance with control procedures in the sample indicates ________.

• A)low control risk when the actual degree of compliance does not justify a low control risk assessment
• B)low control risk when the actual degree of compliance justifies a low control risk assessment
• C)high control risk when the actual degree of compliance would justify a lower control risk assessment
• D)high control risk when the actual degree of compliance would justify a higher control risk assessment

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Definitions:

Law of Demand

The principle that, all else being equal, an increase in the price of a good will decrease the quantity demanded, and a decrease in price will increase the quantity demanded.

Income Taxes

Taxes levied by governments on individual or corporate income.

Car Rental

A service that allows customers to borrow a vehicle for a certain period of time in exchange for a fee.

Competitive Market

A market structure characterized by a large number of buyers and sellers, such that no single buyer or seller can influence the market price.