Which of the Following Statements Is True

question 3

Multiple Choice

Which of the following statements is true?

• A)The risk that material misstatement will not be prevented or detected on a timely basis by internal controls can be reduced to zero by effective control activities.
• B)Cash is more susceptible to theft than an inventory of coal because it has a greater inherent risk.
• C)Detection risk is a function of the efficiency of an auditing procedure.
• D)The existing levels of inherent risk, control risk and detection risk can be changed at the discretion of the auditor.

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Definitions:

Disinhibition

The reduction or removal of inhibition, resulting in an increase in previously suppressed behaviors or actions.

Sensitization

An increased response to a stimulus following repeated exposure, usually associated with adverse or noxious stimuli.

Habituation

A learning process where an organism reduces its responsiveness to a non-threatening stimulus over time through repeated encounters.

Stimuli

External or internal events that elicit a response from an organism.