Which of the Following Is an Accurate Statement Regarding the Risk

question 57

Multiple Choice

Which of the following is an accurate statement regarding the risk assessment process of phase I of the audit process for the sales and collection cycle?

• A) Auditors must perform substantive tests related to assertions deemed to have significant risks.
• B) The auditor must relate control risk for transaction-related audit objectives to balance-related audit objectives in deciding planned inherent risk.
• C) The realizable value balance-related audit objectives are affected by assessed control risk for classes of transactions.
• D) All of the above are accurate statements.

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Definitions:

Explanatory Variables

Variables in a statistical model that are used to explain variations in the dependent variable.

Multiple Regression

A statistical technique used to predict the outcome of a dependent variable based on multiple independent variables.

Hypotheses

Hypotheses are formulated statements that present a proposed explanation to some phenomena, which can be tested through further investigation and experimentation.

Variation

In statistics, it refers to the measure of the spread or dispersion of a set of data points or values in a dataset.