Which of the Following Is an Accurate Statement Regarding Audit

question 27

Multiple Choice

Which of the following is an accurate statement regarding audit risk, audit failure, and business failure?

• A) Audit risk is always avoidable if the audit is conducted in accordance with generally accepted auditing standards.
• B) Because auditors gather evidence on a test basis, and because well-concealed frauds are difficult to detect, audit risk is unavoidable.
• C) Legal precedent makes it easy to determine who has the right to recover losses in the event of an audit failure.
• D) A business failure will always result in an audit failure.

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