Control Risk Is a Measure of the Auditor's Expectation That

question 55

Multiple Choice

Control risk is a measure of the auditor's expectation that the internal controls will:

• A) detect and correct material misstatements.
• B) either prevent material misstatements or detect and correct them.
• C) prevent material misstatements from occurring.
• D) neither prevent material misstatements nor detect and correct them.

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Definitions:

Required Rate

A rephrased definition for the Required Rate of Return; it is the least annual percentage earned by an investment that will entice individuals or companies to put money into a particular security or project.

Expected Growth Rate

The anticipated increase in the value of an investment or index over a specific period of time.

Annual Dividend

The total dividend payment a company offers to its shareholders in a year.

Expected Return

The weighted average of all possible returns for an investment, considering the probabilities of each outcome.