The Auditor's Assessment Relating to Risk of Material Misstatement in Financial

question 59

Multiple Choice

The auditor's assessment relating to risk of material misstatement in financial statements is a part of

• A)the assessment of whether to accept the audit engagement
• B)understanding the entity and its environment
• C)the tests of controls
• D)the tests of transactions

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Definitions:

External Validity

The extent to which the results of a study can be generalized to other situations, populations, or settings.

Alternate Form Reliability

A measure of consistency where different versions of a test produce similar results, indicating the test’s reliability over time.

Concurrent Validity

A measure of how well a particular test correlates with a previously validated measure taken at the same time.

Construct Validity

The extent to which a test or measurement tool accurately measures the theoretical construct it is intended to measure.