Which of the Following Situations Would Provide Auditors with a Lower

question 82

Multiple Choice

Which of the following situations would provide auditors with a lower level of detection risk?

• A) Inspecting an item rather than directly confirming the existence of that item with third parties.
• B) Evaluating a smaller number of transactions or components of an account balance.
• C) Relying extensively on verbal inquiry of client personnel in gathering evidence.
• D) Examining an account that is more susceptible to misstatement because of complex calculations and accounting methods.

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Definitions:

Champagne glass distribution

Refers to the visual representation of income distribution, where most wealth is concentrated at the top, resembling the shape of a champagne glass.

Total world income

The aggregate of all the earnings generated by individuals, businesses, and governments across the entire world within a specific period.

G8 and G20 countries

Groups of major advanced and emerging economies, respectively, that discuss and cooperate on international financial and economic issues.

Developing country

A nation with a less developed industrial base and a lower Human Development Index relative to other countries.