As the Risk of Material Misstatement Increases, What Happens with Detection

question 56

Multiple Choice

As the risk of material misstatement increases, what happens with detection risk?

• A) Medium increase.
• B) Stay the same.
• C) Decrease.
• D) Severely increase.

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Definitions:

Pygmalion Effect

The situation that occurs when a managerial leader believes that a group member will succeed and communicates this belief without realizing it.

Live up to Expectations

The act of meeting or surpassing the anticipations, hopes, or standards set by oneself or others.

Higher-level Needs

Refers to the more abstract, psychological, and self-fulfillment needs that go beyond basic physical or material requirements, such as self-esteem and self-actualization.

Hands-on Guidance

Direct involvement and support in leading others or instructing how tasks should be performed, typically through practical demonstration.