In a Financial Statement Audit, Inherent Risk Is Evaluated to Help

question 113

Multiple Choice

In a financial statement audit, inherent risk is evaluated to help an auditor asses which of the following?

• A)The internal audit department's objectivity in reporting a material misstatement of a financial statement assertion it detects to the audit committee
• B)The risk the internal control system will not detect a material misstatement of a financial statement assertion
• C)The risk that the audit procedures implemented will not detect a material misstatement of a financial statement assertion
• D)The susceptibility of a financial statement assertion to a material misstatement assuming there are no related controls

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Definitions:

Engineers' Fees

Engineers' fees are payments made to engineers for their professional services, which could include consultations, design, project management, or other engineering-related tasks.

Insurance Costs

The expenses incurred by individuals or companies for purchasing insurance coverage, which can include premiums for health, property, liability, and other types of insurance.

Interest

The cost of using someone else's money or the return on invested capital.

Land Improvements

Enhancements made to a plot of land to increase its value, such as landscaping, fencing, and installing irrigation systems.