Which of the Following Is Not an Inherent Risk Factor

question 84

Multiple Choice

Which of the following is not an inherent risk factor for the revenue process?

• A)Complexity of revenue recognition issues.
• B)Difficulty of auditing transactions.
• C)Special industry practices.
• D)The entity does not follow its stated policies for sales order approvals.

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Definitions:

Economies Of Scale

The cost advantage that arises with increased output of a product, as fixed costs are spread over more units of production, reducing the cost per unit.

Diseconomies Of Scale

An increase in average total cost as output rises.

Monopoly

A market structure characterized by a single seller who has exclusive control over a product or service, with no close substitutes.

Natural Monopoly

A market situation where the most cost-efficient production level is achieved by a single firm due to high fixed or start-up costs, making it impractical for new entrants.