Which of the Following Statements Is Not True

question 93

Multiple Choice

Which of the following statements is not true?

• A) Inherent risk is inversely related to the amount of audit evidence whereas detection risk is directly related to the amount of audit evidence required.
• B) Inherent risk is directly related to evidence whereas detection risk is inversely related to the amount of audit evidence required.
• C) Inherent risk is the susceptibility of the financial statements to material error, assuming no internal controls.
• D) Inherent risk and control risk are assessed by the auditor and function independently of the financial statement audit.

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Definitions:

Trade Surpluses

Trade surpluses occur when a country's exports exceed its imports over a given period, indicating a net inflow of domestic currency from foreign markets.

Savings Rate

The proportion of income that is saved rather than spent on goods and services.

Trade Deficit

Occurs when a country's imports exceed its exports during a given time period, leading to an outflow of domestic currency to foreign markets.

Underwood Tariff

An early 20th-century legislative act that substantially reduced tariffs in the United States, aimed at lowering consumer costs and promoting free trade.