When Dealing with Audit Risk

question 30

Multiple Choice

When dealing with audit risk:

• A)audit risk should not be a factor when determining if a new client should be accepted.
• B)audits with a low acceptable audit risk generally result in lower audit fees.
• C)if management of a company has a reputation of integrity, but is also known to take aggressive financial risks, the auditor should not accept the company as a new client.
• D)if the auditor concludes that acceptable audit risk is low, but the client is still acceptable, the auditor may still accept the engagement but increase the audit fee.

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Definitions:

Cultural Bias

The tendency to interpret and judge phenomena by standards inherent to one's own culture, potentially leading to misunderstandings or judgments.

Full Inclusion

The integration of all students, even those with the most severe disabilities, into regular classes and all other aspects of school and community life.

Special Education Programs

Educational arrangements designed to address the unique needs of students with learning disabilities or special needs.

Mainstreaming

An educational approach in which exceptional children are integrated as much as possible into the traditional educational system and are provided with a broad range of educational alternatives.