The Acceptable Risk of Overreliance

question 112

Multiple Choice

The acceptable risk of overreliance

• A) is normally assessed at a high level when auditing an accelerated filer public company.
• B) and the extent of tests of controls depend on assessed control risk for accelerated filer public companies.
• C) and the control risk will be assessed as low for audits where there is extensive reliance on internal controls.
• D) does not impact the effectiveness of the audit.

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Definitions:

Military Ranks

A system of hierarchical relationships in armed forces, police, intelligence agencies, or other institutions organized along military lines.

Personal Freedom

The right of individuals to make choices about their own lives without undue interference from external forces such as the government or society.

Hierarchically Structured

Organized in a way where individuals or groups are ranked one above the other according to status or authority.

Division Of Labor

The allocation of distinct tasks to different people or groups in a social or economic context to increase productivity.