Which of the Following Items Is Not an Important Consideration

question 18

Multiple Choice

Which of the following items 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:

Distribution Center

A specialized warehouse designed to store goods, often in bulk, before they are distributed to retailers or customers.

Time Utility

The increase in the value of a product or service by having it available at the most opportune time, enhancing satisfaction or usefulness.

National Drug Store

A national drug store is a retail pharmacy chain that operates multiple locations across a country, providing medications, health products, and health care services.