Which Element(s)is/are Pervasive to the Application of the Principles Underlying

question 23

Multiple Choice

Which element(s) is/are pervasive to the application of the Principles Underlying an Audit Conducted in Accordance with GAAS particularly the Performance and Reporting sections?

• A)The elements of materiality and audit risk.
• B)The element of internal control.
• C)The element of corroborating evidence.
• D)The element of reasonable assurance.

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Definitions:

Risk Premium

Expected additional return that compensates for the uncertainty involved with an investment.

Treasury Bonds

Long-term government securities issued with the promise to pay periodic interest and repay the principal at maturity.

Expected Cash Flows

The anticipated movement of cash in and out of a business over a future period, often used in financial forecasting.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.