When an Entity Moves into a Significant New Line of Business

question 35

Multiple Choice

When an entity moves into a significant new line of business, all of the following increase except:

• A)client risk.
• B)acceptable audit risk.
• C)risk of material misstatement.
• D)entity business risk.

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Definitions:

Social Influence

The process by which individuals change their thoughts, feelings, or behaviors as a result of interaction with others, including conformity, compliance, and obedience.

Group Norms

Shared standards or expectations that guide the behavior of members within a group.

Change in Norms

denotes a shift in the accepted standards of behavior or beliefs within a society or group over time.

Obedience

The compliance with orders, commands, or laws from authority figures, often considered a form of social influence.