Which Is a True Statement About Audit Risk

question 83

Multiple Choice

Which is a true statement about audit risk?

• A) Audit risk measures the risk that a material misstatement could occur and not be detected by internal control.
• B) When auditors decide on a higher acceptable audit risk, they want to be more certain that the financial statements are not materially misstated.
• C) Audit assurance is the complement of acceptable audit risk.
• D) There is an inverse relationship between acceptable audit risk and planned detection risk.

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Definitions:

Lean Production

A manufacturing approach aimed at minimizing waste and increasing efficiency by focusing on value creation for the end customer.

Small-batch Production

A manufacturing method that produces goods in small quantities, allowing for greater flexibility and customization.

Lean Production

A manufacturing principle focused on minimizing waste and maximizing efficiency and productivity by streamlining processes and improving quality.

Manufacturing Technology

refers to the broad set of engineering and technological practices used in the production of goods and services, involving both hardware and software innovations to improve efficiency and product quality.