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:

Euro

The official currency of 19 out of the 27 European Union countries, which constitutes the Eurozone.

European Union

A political and economic union of 27 European countries that are located primarily in Europe, aimed at fostering economic cooperation and ensuring free movement of goods, services, and people.

Russia

Russia is the largest country in the world by area, spanning Eastern Europe and northern Asia, with a rich history, diverse culture, and significant global political and economic influence.

Yugoslavia

A country that existed in Southeast Europe during most of the 20th century, comprising several Slavic ethnic groups and dissolved in a series of wars in the 1990s.