The Auditor Should Understand the Client's Business Factors-Such as Information

question 45

Multiple Choice

The auditor should understand the client's business factors-such as information about related parties-because they may indicate

• A) reasons not to accept the engagement.
• B) areas of increased audit risk.
• C) areas of increased control risk.
• D) areas of increased client business risk.

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Definitions:

Industry

The collection of businesses and activities that supply a particular service or commodity.

Market Sector

A segment of the economy that encompasses businesses and customers engaged in a similar type of economic activity or service.

Organizational Culture

The set of shared values, beliefs, and norms that influence the way employees think, feel, and behave within an organization.

St. Joseph Hospital

A healthcare institution, likely named for Saint Joseph, providing medical services, treatment, and care to patients in its community.