At Every Audit Engagement the Auditor Is Required to Consider

question 91

Multiple Choice

At every audit engagement the auditor is required to consider that there could be significant risks of misstatement for revenue recognition.At ABC Ltd. ,the auditor has concluded that,yes,there are material risks of misstatement associated with revenue recognition.How does this affect the extent of testing for accounts receivable?

• A)Audit risk will be increased.
• B)Inherent risks will be decreased.
• C)Decreased control testing is required.
• D)Increased substantive testing is required.

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Definitions:

Average Product

The output per unit of input, calculated by dividing total production by the number of units of input.

Marginal Product

The additional output that is produced by adding one more unit of a particular input, keeping other inputs constant.

Short-Run Curve

Refers to a period in economics during which at least one factor of production is fixed, affecting production and cost decisions.

Marginal Product

The change in output resulting from employing one more unit of a particular input while holding all other inputs constant.