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.

Understand the classification and reporting of held-for-trading securities on the balance sheet.

Distinguish between creditor and owner relationships in securities.

Identify and understand equity securities intended for active management and trading for profit.

Comprehend the reporting of long-term investments in available-for-sale securities on the balance sheet.