An Audit Team Uses the Assessed Risk of Material Misstatement

question 102

Multiple Choice

An audit team uses the assessed risk of material misstatement to

• A) Evaluate the effectiveness of the entity's internal control policies and activities.
• B) Identify transactions and account balances where inherent risk is at the maximum.
• C) Indicate whether materiality thresholds for planning and evaluation purposes are sufficiently high.
• D) Determine the acceptable level of detection risk for financial statement assertions.

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Definitions:

Projective Personality

A type of personality assessment that relies on projecting one's own interpretations onto ambiguous stimuli to uncover underlying thoughts and feelings.

Objective Personality

Personality assessment tools or methods that rely on structured, standardized questions or prompts to evaluate personality traits with minimal subjective interpretation.

Bender Visual-Motor Gestalt Test

A psychological assessment tool that evaluates visual-motor functioning, planning, and organizational abilities through the copying of geometric shapes.

Projective Personality

Assessment techniques that use ambiguous stimuli to elicit responses reflecting aspects of an individual's personality.