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

question 35

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 that an entity faces may result in financial report errors and fraud.
• B) Business risk factors affect the ability of an entity to be profitable and survive.
• C) Auditing standards include many entity business risk factors that identify circumstances that increase the likelihood of material misstatements.
• D) Auditing 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:

Cognitive Realms

Areas or aspects of mental processes and activities, including thinking, reasoning, and understanding.

High Expectations

The belief or hope that someone or something will achieve a high level of performance or success.

Privileged Communication

A legal concept that protects certain communications from being disclosed in court without the consent of the party who made the communication.

Legal Concept

A foundational idea or principle within the field of law that outlines rights, duties, procedures, and penalties, helping to structure legal reasoning and judgment.