What Is the Nature of the Relationship Between Risk of Material

question 85

Multiple Choice

What is the nature of the relationship between risk of material misstatement and audit risk?

• A)Direct.
• B)None.
• C)Correlational.
• D)Inverse.

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Definitions:

Cognitive Dissonance

The psychological discomfort experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time.

Behavior

The actions or reactions of an individual in response to external or internal stimuli.

Postdecisional Dissonance

Postdecisional dissonance is the psychological discomfort experienced after making a difficult choice, often leading individuals to justify their decision or devalue the rejected alternatives to reduce the dissonance.

Selective Exposure

The tendency of individuals to favor information that reinforces their pre-existing views while avoiding contradictory information.