You Generally Consider Your Audit Client's Management to Be Honest

question 38

Multiple Choice

You generally consider your audit client's management to be honest. However, they do have a bias towards wanting to understate their income to lower income taxes. How would this bias be implemented in the audit risk model?

• A) reduce audit risk and reduce inherent risk
• B) increase audit risk and reduce inherent risk
• C) reduce audit risk and increase inherent risk
• D) increase audit risk and increase inherent risk

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Definitions:

Upper Paleolithic

The final phase of the Paleolithic period, marked by significant advancements in technology, art, and cultural complexity among early humans.

Neolithic

The final stage of cultural evolution or technological development among prehistoric humans, characterized by the transition from nomadic hunting and gathering to settled farming and community living.

Biological Traits

Characteristics or features of organisms that can be observed and are often determined by genetic inheritance.

Gene Flow

The transfer of genetic material from one population to another, enhancing genetic diversity within populations.