The Risk Assessment Component of Internal Controls Refers To

question 49

Multiple Choice

The risk assessment component of internal controls refers to:

• A)the auditor's assessment of control risk.
• B)the auditor's assessment of engagement risk.
• C)the entity's identification and analysis of risks relevant to achievement of its objectives.
• D)the entity's monitoring of the potential for material misstatements.

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Definitions:

Consciousness

Consciousness is the state of being aware of and able to think about one’s own existence, sensations, thoughts, surroundings, and experiences.

Awareness

The state of being conscious or informed about something.

External Stimuli

Environmental factors or influences that can elicit a physiological or psychological response from an individual.

Optimal

The best or most favorable condition, level, or amount of something for a particular situation or purpose.