Which of the Following Recognizes That an Audit Conducted Under

question 112

Multiple Choice

Which of the following recognizes that an audit conducted under generally accepted auditing standards may not detect all material misstatements?

• A) Absolute assurance.
• B) Professional judgment.
• C) Persuasiveness of audit evidence.
• D) Reasonable assurance.

---

Definitions:

Risk Averter

An individual or entity that prefers to avoid uncertainty and potential losses when making investment or financial decisions.

Expected Value

In probability theory, it is the weighted average of all possible values of a random variable, with weights being the probabilities of each outcome.

Natural Log

The logarithm to the base e, where e is an irrational and transcendental constant approximately equal to 2.71828.

Risk Averter

An individual or entity that prefers to avoid risk, typically choosing options with more certain outcomes over those with higher, but more uncertain, returns.