When Assessing Risk, It Is Important to Remember That

question 57

Multiple Choice

When assessing risk, it is important to remember that

• A) for acceptable audit risk, the SEC decides the risk the CPA firm should take for public clients.
• B) inherent risk can be changed by the auditor.
• C) detection risk can only be determined after audit risk, inherent risk, and control risk are determined.
• D) control risk is determined by company management since they are responsible for internal control.

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Definitions:

Brand-Leadership Strategy

Strategic approach focusing on establishing a brand as a leader in its category or market through marketing, innovation, and consumer engagement.

Diversifies

The act of expanding or varying products, investments, or activities to spread or reduce risk, or to increase the range of operations.

Brand Name

The name given to a product or service by its manufacturer or provider, used for identification and marketing purposes.

Knowledge Management

The process of capturing, distributing, and effectively using knowledge within an organization.