PA Has Set Audit Risk at 5% and Determined That

question 32

Multiple Choice

PA has set audit risk at 5% and determined that inherent risk and control risk is at 100%. What is the detection risk?

• A) 5%
• B) 50%
• C) 95%
• D) 20%

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Definitions:

Product Price

The amount of money required to purchase a good or service.

Marginal Cost

The additional expense associated with creating another unit of a product or service.

Total Cost

The aggregate expenditure related to the manufacturing of products or services, which includes both stable and changeable costs.

Variable Inputs

Inputs in production that change in quantity depending on the level of output, such as raw materials and labor.