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There Are Several Factors the Auditor Should Consider When Assessing

question 95

Essay

There are several factors the auditor should consider when assessing inherent risk.Discuss four of these factors, and for each factor, explain the factor's effect on the auditor's assessment of inherent risk.


Definitions:

Nondiscriminating Monopolist

A monopolist that charges all consumers the same price for its product or service.

Demand Schedule

A table that shows the quantity of a product or service demanded at various prices.

Profit-maximizing

A strategy in business where the main goal is to increase profits to the highest possible level given the constraints of the market.

Elastic Segment

A portion of the demand curve where the quantity demanded is highly sensitive to changes in price.

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