An Increased Extent of Tests of Controls Is Most Likely

question 100

Multiple Choice

An increased extent of tests of controls is most likely to occur when

• A) it is a first-year audit.
• B) the auditor is doing a "fraud audit."
• C) controls are effective and the preliminary control risk assessment is low.
• D) controls are ineffective and the preliminary control risk assessment is high.

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Definitions:

Proprietor's Opportunity

This term is not commonly defined in financial or business glossaries as a standalone concept. It may refer to entrepreneurial opportunities or advantages available to a business owner but lacks a standard definition.

Sole Proprietorships

A business structure where a single individual owns and operates the business, bearing full responsibility for its debts and liabilities.

New Businesses

Entities that have been recently established to pursue commercial, social, or other forms of organizational goals.

State Regulation

Laws and rules established by governmental entities at the state level to control or direct the behavior of individuals, businesses, and other organizations.