Which of the Following Is Not an Important Consideration in an Auditor's

question 52

Multiple Choice

Which of the following is not an important consideration in an auditor's evaluation of an entity's business risk?

• A)The specific business risks an entity faces that may result in financial statement errors and fraud.
• B)Business risk factors that impact the ability of the entity to be profitable and survive.
• C)Audit standards include many entity business risk factors that identify circumstances that increase the likelihood of material misstatements.
• D)Audit standards require the auditor to evaluate the entity's business risk in order to provide suggestions to improve the entity's profitability.

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Definitions:

Clayton Act

A U.S. antitrust law, enacted in 1914, aimed at promoting fair competition and preventing monopolies by prohibiting certain anti-competitive practices.

Federal Trade Commission (FTC)

A U.S. federal agency tasked with protecting consumers and maintaining competition by preventing anticompetitive, deceptive, and unfair business practices.

Anticompetitive Effect

The impact of certain practices or agreements that reduce or eliminate competition within a market, often scrutinized under competition law.

Office Supply Superstores

Large retail outlets specializing in the sale of office supplies and equipment to consumers and businesses.